Bank of Uganda (BoU) has cleared Post Bank to operate as a tier one commercial bank.
Post Bank will now no longer be categorised as a credit institution, but rather as a deposit-taking financial organisation that offers loans for investment, which is in compliance with the definition of a commercial bank as specified in the Financial Institutions Act, 2004.
Some of the services provided by a tier one commercial bank include; acceptance of call, demand, savings, and time deposits that can be withdrawn by check or other means.
Others are provision of overdrafts and short-to-medium-term loans, provision of foreign exchange facilities; acceptance and discounting of bills of exchange; provision of financial and investment advice; participation in inter-bank clearing systems; and provision of guarantees, bonds, or other kinds of collateral, as well as accept and place third-party drafts and promissory notes in connection with operations in which they are involved.
PostBank’s CEO/MD Julius Kakeeto described the development as a historic milestone, saying that with the new management’s goal of strengthening Post Bank’s foundation, efforts have been put into digital transformations that will improve customer experience.
He also stated that with these changes at the Bank, the institution will maximize its potential and compete effectively with aggressive privately owned financial institutions.
“What we’ve been doing is building the foundation—a very solid foundation, because with a very solid foundation, you can do so many things, including competitiveness and growth,” he said in a press release.
Kakeeto stated in the statement that a two-year rigorous restructuring process had given the institution a competitive edge, with a new Board of Directors and several top-tier bankers joining senior management. This enabled the bank to achieve its highest-ever net profit of Shs10 billion in 2020.