End of an era for Bank of Uganda’s Iron Lady

On October 20th, 2016, a text message arrived in several inboxes of the media. It was meant for an urgent press conference at the Bank of Uganda (BoU) headquarters. BoU’s invitations are usually done in 3-4 days in advance. This one was immediate.

“Bank of Uganda is going to announce that it has taken over the management of Crane Bank,” I briefed my editor at the time. This was a story we had been following, at least since Crane Bank had made a loss of Shs3.3bn at the end of 2015. The rumors were just too many, the cracks were beginning to emerge.

On the 7th Floor boardroom at BoU, we waited for the confirmation by BoU that Crane Bank was no-longer under the management and control of Sudhir Ruperelia. For about an hour, we waited. Speculating. As the top brass walked of BoU walked into the boardroom led by Prof. Emmanuel Tumusiime-Mutebile, the Governor, specific attention was paid to Justine Bagyenda, the ED Supervision at the time.

Mutebile’s remarks were scripted and announced that they had taken-over Crane Bank management and sent the directors packing.

The ED Supervision is responsible for the monitoring the operations of banks in the country to ensure depositors funds are safe. Her comments on the day were important. It was at the press conference that she noted BoU had been watching Crane Bank for a while and that is what informed the takeover. The press conference ended and the sideshow started.

From that day on, Bagyenda was thrust into the limelight. She was blamed in some circles for failing to identify the cracks in Crane Bank early enough.

At some point, her assets were exposed, with several people insisting she had accumulated so much. The eventual court case where Sudhir Ruperelia was sued even made it worse for her. Was she to be the sacrificial lamb in BoU after the Crane Bank saga?

Her transition to retirement has been ongoing for over six months.


On 7th February 2018, Prof. Mutebile made significant changes in the bank, including the appointing of a new ED for Supervision. Bagyenda was finally going to be let go.

In a conversation with a BoU official in 2016, just after the Crane Bank takeover by the regulator, he revealed that Bagyenda was going to retire in 2017. She was already planning her exit, with or without the failures of Crane Bank.

In 2005, Bagyenda was appointed the BoU ED Supervision, after the enactment of the Financial Institutions Act (FIA) in 2004. Her role at the time was to ensure that her team was able to supervise the banking sector and ensure that the mistakes of the 1990s, characterized by bank failures were not repeated. She oversaw the lifting of the moratorium on opening new commercial banks in 2006. This ushered in several banks including Equity, KCB, BOA, BOI, NC Bank and CBA among others.

More importantly, the supervision department has been able to ensure that banks are well capitalized, even above regulatory requirements. In a letter to the IMF in 2017, BoU officials pointed out that most banks meet the minimum capital requirements. In other words, there are adequate buffers to avert a crisis. BoU has a minimum capital requirement of any new bank set up in Uganda at Shs25bn. But that is not all. Banks are now also required to hold capital reserves that are a certain percentage of their assets. Using the risk-based supervision model, BoU is able to determine whether a bank is able to withstand shocks.

The reforms in supervision have seen Uganda’s banking sector is a benchmark for some countries that implement the Basel II and III global standards.

Through some of those “rules” Global Trust Bank in 2014, National Bank of Commerce in 2012. Eventually, it was the same rules that caught up with Crane Bank. Unlike the closures of the 1990’s, commercial bank failures often came at a cost; depositors lost their money. She ensured that there was a competent team around her. It is that team that Bagyenda led that has kept the financial system, specifically commercial banks, in check.

However, her reputation appears to have been tainted by the Crane Bank troubles. For all the diligence, as regulators, they could not spot the cracks. If they did identify the problems and pointed them out, then it must have been that the clearance level was higher than what she was meant to know.

Regulators can be duped. At least the IMF did note that BoU needed to strengthen supervision in order to curb forms of misreporting by financial institutions. 

It should be noted that there is a no criminal liability yet to be proven or brought to court that indicates she was culpable for the failure of Crane Bank.

If you are buying the narrative that she was leaving because of the Crane Bank saga, then you are buying the story they have sold to you.


Bagyenda holds a Bachelor’s degree in Finance, Diploma in Credit Appraisal and an MBA Finance at the Edinburgh Graduate Business School, Heriot-Watt University, Scotland.

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