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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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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We have been told that the governor Bank of Uganda is planning to launch a new 100,000 shillings banknote at the Bank of Uganda head offices in Kampala. The date for the launch is still not clear as the new banknote is still under discussion.

So soon Ugandans on the ground will be receiving this bank note at the counters of Uganda’s commercial banks e.g. Stanbic Bank, Bank of Baroda, Centenary Bank, Equity Bank, and Cairo bank among others.

The Bank of Uganda, launched the following new banknotes last year 2,000/=, 1,000/=, 20,000/=, 10,000/=, and 5,000/=.

Efforts to talk to the governor Bank of Uganda, Tumusiime Mutebile for a comment were in futile by press time.

Sources in the Bank of Uganda told us that the governor Bank of Uganda uses the bank of Uganda branches as well as commercial banks to distribute the banknotes to Ugandans across the country.

Many Ugandans are still not saving their money with the commercial banks but they instead keep it in their homes.

The post Bank of Uganda plans to launch 100,000 banknote 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

The post Traders to sue commercial banks over high interest rates charged on loans first appeared on Uganda Multimedia News & Information.

The commercial banks operating in Uganda charge over 27% on loans. Our reporters in Mityana, Kampala and Mubende among other districts have told us that most of the shops in Kampala and other districts have not opened today amidst the government requests to them to open the shops.

The spokesman of Kampala City Traders Association (KACITA), Issa Sekitto has told us that they will continue with the strike for the next three days until the government directs commercial banks to reduce the interest rates. The government deployed soldiers to threaten traders not to open shops in vain.

The post Shops closed as traders in Uganda open strike first appeared on Uganda Multimedia News & Information.

The commercial banks operating in Uganda charge over 27% on loans. Our reporters in Mityana, Kampala and Mubende among other districts have told us that most of the shops in Kampala and other districts have not opened today amidst the government requests to them to open the shops.

The spokesman of Kampala City Traders Association (KACITA), Issa Sekitto has told us that they will continue with the strike for the next three days until the government directs commercial banks to reduce the interest rates.

The government deployed soldiers to threaten traders not to open shops in vain.

By Moureen Nakyanzi

The post Shops closed as traders in Uganda open strike first appeared on Uganda Multimedia News & Information.

The company announced that Entebbe is their third East African operation with four non-stop weekly flights between Entebbe and Bahrain.

The inaugural flight GF719 from Bahrain International Airport landed in Entebbe International Airport at 15.45 PM on 5^th December 2012 carrying a high-level delegation onboard that included airline representatives and members of the media from the Middle East, led by the airline’s Chief Services Officer Mr. Marcus Bernhardt.

The welcome ceremony included a water salute and an official reception by Uganda Civil Aviation Authority Managing Director, Dr. W. Rama Makuza.

Addressing the media Bernhardt said they delighted to re-commence services to Entebbe.

He says with the commencement of our services between Bahrain and Entebbe, they are opening the doors for commercial and tourism opportunities in East Africa, the MENA region and beyond.

Bernhardt adds that they are hopeful this new route will be a success for both passenger and cargo operations as well as facilitating business and leisure traffic between the two countries and beyond.

He says Gulf Air is the national carrier of the Kingdom of Bahrain and the largest network operator in the Middle East.

Ultimate Media

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