DPF assures Mercantile Bank depositors

2,850 consumers who had accounts with the now-closed Mercantile Credit Bank Ltd. are expected to receive payments from the Deposit Protection Fund (DPF) and the Bank of Uganda. However, the validity of the Bank of Uganda clients’ personal information and the closed ban will determine this.

On Saturday, the Deposit Protection Fund began disbursing payments to insured depositors using the Mobile Money platforms, up to a maximum of one million shillings.

The Fund claims that although it is prepared to promptly refund impacted depositors, it faces difficulties in verifying the clients because a large number of them do not update their personal data.

Many people, meanwhile, do not have their mobile phone number match the information on their National Identity Cards.

This is one of the main difficulties the agencies encounter while making payouts, according to the Deposit Protection Fund (DPF).

In order to make it simpler and quicker to pay account holders in the event of a crisis, DPF Chief Executive Officer Julia Clare Oyet strongly advises all account holders at the various financial institutions to make sure that their personal information is kept up to date.

Up till now, five months later, such obstacles have prevented the return of 25% of the money retained by the liquidated EFC Uganda.

Clients with balances over one million shillings and up to ten million will be paid through Stanbic, the bank that the Bank of Uganda has assigned to manage their accounts. Given that it is located in the region with the greatest number of Mercantile Credit Bank Ltd. clients, Stanbic’s Lugogo branch was selected.

The Deposit Protection Fund is mandated by regulations to safeguard deposits up to 10 million shillings per account, which it will reimburse in the event of necessity.The Central Bank is responsible for handling deposits over 10 million.

According to statistics regarding the clients of the closed bank, there were 1,980 individual account holders out of the total depositors. Of these, 1,896 were fully protected, meaning they would receive their deposit back in full, and 84 were partially protected, meaning they held more than 10 million shillings in the bank.

The funds over 10 million shall be referred to BoU for management. There were 424 company account holders, of which 370 had full protection and 54 had limited protection.

On the other hand, there are 213 joint accounts, of which 191 are prolonged and the remaining ones are partial. Additionally, according to the statistics, there were 233 trust accounts, 299 of which were totally safeguarded.

Holders of Company, Joint, and Trust accounts are instructed to bring their supporting documentation to the DPF offices for verification on Monday, July 8.

Financially speaking, DPF intends to reimburse the 1.391 billion that was fully protected (i.e., 1 percent of the total), fully catered for, and fully protected (i.e., not exceeding 10 million shillings). This represents 46% of DPF’s obligation.

According to Michael Lugemwa, Director of Finance at DPF, the partially protected deposits (more than 10 million shillings) amounted to 110.395 billion, of which 1.64 billion will be reimbursed by DPF, putting the total amount of DPF’s duty to 3.031 billion shillings.

The Bank of Uganda is expected to announce how the rest of the deposits, about 108.7 billion shillings will be handled.