Banking System

  • Posted on: 1 December 2010
  • Updated on: 1 December 2010
  • By: radmin

The Structure of the Banking Industry:
A brief history of Banking in Uganda

The banking industry in Uganda is composed of commercial banks and other financial institutions e.g. Housing Finance, Post Bank and the Central Bank.
Banking has existed since 1906 with the establishment of the National Bank of India which later became the Grindlays bank and is now known as the Stanbic bank. The East African Board was responsible for the issue of currency until 1966 when the Bank of Uganda was establishment by the 1966 Parliament Act.Standard bank was opened in 1912. Bank of Netherlands 1954 which later merged with Grindlays bank and Baroda was established in 1965.
The 1965 Parliament Act established the Uganda Credit and Savings bank which later became Uganda Commercial Bank.For a long time, the government owned banks or financial institutions dominated the banking industry. These include Uganda Development Bank which received all foreign loans and channeled them to the local companies for development; UCB, which handled the majority of the customers (and still does) with the biggest number of branches (about 67 in number) and the East African Development Bank which handled the East African Community business.
By 1970, Uganda had more than 290 commercial banks branches which reduced to 84 in the period between 1970 and 1980’s. The UCB owned a total of 50 branches out of the 84 branches.In the same way, the number of cheques being cleared and reduced from 5,400 in the 1960’s to 2,900 in 1973 and in 1983 the total number of cheques cleared had further reduced to 2,700. Today total number of cheques cleared has risen to an average between 5,000 and 6,000 per day.

Central Banks: