Appearing before the committee chaired by Buliisa county Stephen mukitale wondered how commercial banks charge interest rate in the range of 27% which is beyond the interest rate set by bank of Uganda  for commercial bank to charge from borrowers.

Mps said that the fair interest rate should have been at 15% as advised by bank of Uganda to be fair to business community.

Mps who included, padyere county mp Joshua Anywarach, Christine Acayo said that investors and business people are losing their assets they put in banks to get loans after banks increase their interest rates without first agreeing with a borrower.

MP Acayo said that the move by commercial banks to charge high interest rate is sabotaging government programmes of creating jobs for the peoples.

The Director supervision bank of Uganda Justine Bagenda said that bank of Uganda is still pressing hard to ensure that commercial banks reduce on interest rate charged from borrowers

Bagenda said that commercial banks are responding positively and are reducing their interest rates but says that central bank is concerned at a slow pace that commercial banks are moving on in reducing their rates.

She said that the changes in commercial banks do not much with the changes made by central bank the incident that she described as unfortunate.

Bagenda however said that central bank has limited powers over commercial banks since Uganda is operating under liberalized economy but says that engagements are ongoing and changes will be realized soon.

In November 2011 interest rates were at 30% in most of the commercial banks but it is now said that most banks have reduced to  between 21to 23%.

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2011 MLS Salary Grid (Photo credit: Bernhardt Soccer)

Finance to pressurize commercial banks to treat the salary loans differently.

Members of parliament say that salaries more especially for civil servants don’t change

and therefore the interest rates and the period of payment for salary loans should not be changed.

Samia Bugwe north Julius Maganda says salary earners took the loans long time but banks increased interest rates without considering the income of such people.

He says that government should come up with a policy that protects low income earners who survive on loans.

He says government should not allow banks to change the salary loan agreements because they are sensitive.

The post Salaried workers demand better loan conditions first appeared on Uganda Multimedia News & Information.

This was during the central banks officials interface with the members of parliament on the parliamentary committee on national economy chaired by Buliisa county mp Steven Birahwa Mukitale.

Bagenda says that commercial banks are responding positively and are reducing their interest rates but says that central bank is worried about the slow pace at which commercial banks are effecting the reductions.

She says that the changes in the interest rates are commensurate with the changes made by central bank which she says as unfortunate.

She adds that although the Central Bank has limited powers over commercial banks since Uganda is operating under liberalized economy, engagements are ongoing and changes will be realized soon.

In November 2011 interest rates were at 30% in most of the commercial banks but a recent mini survey carried out by KFM shows that most banks have reduced their rates to between 21 to 23%

The post Banks urged to reduce lending rates further first appeared on Uganda Multimedia News & Information.

A number of commercial banks have been cutting lending rates following continued appeals by the governor over high lending rates despite cuts in central bank rates.

Announcing the monthly central bank rate Mutebile said that he has noticed some reductions in lending rates by commercial banks.

The central bank rate has now been set at 13% from 15% last month.

Meanwhile the governor says he does not expect any further reduction in inflation rates because it might have negative economic implications for Uganda.

The post Mutebile hails commercial banks on lending rates first appeared on Uganda Multimedia News & Information.

The governor bank of Uganda Tumusiime Mutebile has ordered commercial banks to reduce their lending rates because the Central Bank has also lowered the Central Bank Rate.

The rate at  which Bank of Uganda lends to commercial banks standards at  17% in this month of August 2012 down from 19% in July the same year.

Mutebile announced this on Thursday morning in Kampala while he was issuing the Monetary Policy Statement for the month of August. Tumusiime-Mutebile urged the commercial banks to to lower their lending rates saying that this will attract more borrowers.

Mutebile says that the Bank of Uganda is happy that the inflationary pressures have been subdued and the forecasts point to inflation dropping to single digits in the next two to three months.

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It is alleged that the new Automated Teller Machine (ATM) scam is costingUganda’s commercial banks big sums of money in compensating their bank customers.

The police spokesperson forKampala, Ibin Ssenkumbi says that people have lodged a lot of complaints against different commercial banks. Factors indicate that the ATM bank theft is on increase especially inKampala.

The complainants alleged that the bank confiscates their ATM cards and deducts their money. The thugs tamper with peoples ATM bank card reader and steal their PINs before they use the ATMs to steal people’s money. Police have learnt that the bank ATM robbery is done after the thugs insert an ATM trap that later captures peoples ATM cards.

Police says that the thugs use X-Ray Films to trap peoples ATM PIN numbers. Senkumbi says that the thieves use highly technologically well-equipped science and they are so sophisticated.

The post How conmen steal money using ATM first appeared on Uganda Multimedia News & Information.

The government on Thursday promised to double youth funds from 25 billion shillings to 50 billion shillings in the financial year 2012/2013. The government recently signed an agreement with three commercial banks in Kampala to create the 25 billion shillings youth joint venture fund.

The banks were Development Finance of Uganda (DFCU) bank, Stanbic Bank and the catholic church owned Centenary Rural Development Bank.

The money to be doubled will support the growth of business ventures owned by the youth in Uganda aged between 18 and 35 years and help them to create jobs for themselves.

The finance minister, Maria Kiwanuka explains that the 50 billion shillings will help the youth to start up their own jobs.

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The minister ofUgandafor Finance Minister, Maria Kiwanuka says that the banks will charge 15% for a period of six months.

Some of the banks the government has agreed with include Stanbic Bank, DFCU Bank and Centenary Bank.

Ms Kiwanuka says that the government has put aside 25 billion shillings in the 2011/2012 national budget for the unemployed youths.

Ms Kiwanuka signed the Memorandum of understanding with Centenary Bank, DFCU Bank and Stanbic bank managers inKampalatoday.

Ultimate Media

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The workers at the bar have told us that they are soon beading farewell to its customers.

We hear the workers at Bead for life bar have started looking for other jobs. Now we take this opportunity to ask the government and  banks to save Bead for life bar before it completely close shop and Ugandans working there lose jobs.

The post Bead for life bar in Bugolobi soon closing shop first appeared on Uganda Multimedia News & Information.

Kayondo says that despite having resumed business, the traders still need to put more pressure on the government to put a ceiling on the interest rates commercial banks charge on loans.

The traders went on a three day sit down strike last week demanding that the commercial banks withdraw the increased interest rates on new and old loans. Kayondo says that even though they have opened their shops the government still needs to come out and protect the interests of traders. He was addressing journalists inKampalatoday.

Kayondo says the traders are still waiting for the government’s response on the issue of high interest rates. He says that the moment the government fails to solve the problem the traders will definitely sue the commercial banks.

By Walakira Nyanzi

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