Uganda - Apply for a Licence to Establish Financial Institution.

ProcedureEdit

An application for a licence shall be made in duplicate, in the form prescribed by the Bank of Uganda and shall be accompanied by the supporting documents specified in the section of Required document section under this procedure.
An application for a licence must specify the class of licence being applied for and other activities that may fall under other classes of licence, which the applicant intends to carry out.
A non-refundable application fee of Uganda shillings one million for banks, and Uganda shillings five hundred thousand for non-bank financial institutions shall accompany each application for a licence.
You will be issued with an application form, fill it out accurately, attach the requirements and submit them for verification and processing.
- Attach the following supporting documents and information to accompany the application.
  - An information sheet for the applicant and for each of its substantial shareholders (if corporate), subsidiaries or affiliates in the form prescribed by Bank of Uganda.
  - A personal declaration form for each of the proposed directors, officers and substantial shareholders (if natural persons) in the form prescribed by Bank of Uganda.
  - Individual credit references for the applicant and each of the substantial shareholders, directors and officers from his or her bankers.
  - Proposed capital structure of the financial institution.n
  - A business plan and financial projections for at least three years (including the assumptions underlying the projections and a sensitivity analysis of the plan on varying assumptions);
  - The Certificate of Incorporation.
  - the Memorandum and Articles of Association;
  - with respect to foreign applicants, a statement from the supervisory authority of the home country declaring that it has given prior approval or a “No objection” for the establishment of a subsidiary or any other office in Uganda, and that the applicant’s chairperson, directors, managers and substantial shareholders as a whole, are fit and proper persons within the meaning of the Act;
  - existing financial institutions and companies which have been engaged in other businesses before applying to do financial institution business, should provide certified copies of audited financial statements for the past three years prepared in accordance with generally accepted accounting principles;
  - if the most recent audited accounts are more than six months out of date, they should be accompanied by management accounts (which need not be audited) showing the current financial position and the current results of the institution;
  - a certified copy of the resolution of the Board of Directors, authorizing the preparation and submission of the application;
  - any other information relating to the viability of the proposed institution or other matters which the applicant may consider relevant; and
  - Any other information which the Central Bank may request the applicant to provide.
The submission of any untrue or misleading information shall render the applicant a person not fit and proper and shall constitute sufficient grounds for rejection of the application or revocation of the licence, where a licence has been granted, in accordance with sections 10 (8) and 17 (h) of the Act.
Upon receipt of an application form together with the requisite application fee and supporting documents in accordance with regulations, the Supervision Function of the Central Bank shall, within ten days, send the applicant a formal letter of acknowledgement or a letter of deficiency.
A letter of acknowledgement shall constitute official notice that the documents submitted were found to be complete and that the processing or evaluation may commence.
A letter of deficiency shall outline deficiencies in the application, provide a deadline for rectification of the deficiencies and no further action shall be taken by the Central Bank unless the deficiencies are rectified within the period prescribed.
The Central Bank shall, within six months after receipt of a complete application and in accordance with section 12 of the Act, investigate and prepare a detailed report in respect of each application.
The report shall indicate the decision of the Central Bank to
- grant the licence if it is satisfied that the application satisfies the requirements of the Act and these Regulations;
- grant the licence subject to the fulfillment of certain conditions that it may deem necessary.
- grant the applicant a limited licence covering only part of the financial institution business for which it is satisfied that the applicant meets the requirements.
- refuse to grant the licence for reasons that shall be stated in the notice of decision or letter of refusal.
The Central Bank shall inform the applicant, in writing, of its decision to grant or refuse to grant the licence.
A notice communicating the decision not to grant a licence shall state the grounds upon which it is based.
Where the Central Bank decides to grant a licence, it shall, in the notice communicating the decision to grant a licence, require the applicant to submit, within a period of two weeks after the date of receipt of the notice, a certificate of deposit in the name of the applicant indicating that it has deposited or invested an amount not less than the required minimum paid-up capital in such accounts or assets approved by the Central Bank, before a licence can be issued.
Successful applicants shall further be required to:-
- provide the Central Bank with complete operating manuals covering policies and procedures on loans, investments, deposits, foreign exchange and other major operations of the financial institution;
- provide information regarding risk management policies and procedures covering credit, liquidity, interest rate, foreign exchange and operational risks;
- provide information regarding management information systems, description of sample forms, reports and schedules;
- provide any other documents or information, which the Central Bank may require; and
- pay the licence fee prescribed by the Central Bank under section 13 of the Act within fourteen days of receipt of the notice of decision to licence the applicant.

Note 1: Any person aggrieved by a decision of the Central Bank refusing to grant him or her a licence may, in accordance with section 12(9) of the Act, appeal to the High Court against the decision within thirty days after being notified of the decision.
Note 2: No financial institution shall open for business without prior clearance from the Central Bank which shall conduct a pre-opening inspection of the proposed premises to confirm the adequacy of the premises for the proposed business, strong room and vault and the existence of a security system, electronic equipment and communication facilities suited to the type of financial institution concerned.

Required DocumentsEdit

A certificate of incorporation and memorandum and articles of association from Uganda Registration Services Bureau.
A business plan and financial projections for at least three years (including the assumptions underlying the projections and a sensitivity analysis of the plan on varying assumptions).
A certified copy of the resolution of the Board of Directors, authorising the preparation and submission of the application.
An information sheet for the applicant and for each of its substantial share holders (if corporate), subsidiaries or affiliates.
Existing financial institutions and companies which have been engaged in other businesses before applying to do financial institution business, should provide certified copies of audited financial statements for the past three years prepared in accordance with generally accepted accounting principles.
If the most recent audited accounts are more than six months out of date, they should be accompanied by management accounts (which need not be audited) showing the current financial position and the current results of the institution.
Individual credit references for the applicant and each of the substantial shareholders, directors and officers from his or her bankers.
Personal declaration form for each of the proposed directors, officers and substantial shareholders ( if natural persons).
Proposed capital structure of the financial institution.
With respect to foreign applicants, a statement from the supervisory authority of the home country declaring that it has given prior approval or a “No Objection” for the establishment of a subsidiary or any other office in Uganda, and that the applicant’s chairperson, directors, managers and substantial shareholders as a whole, are fit and proper persons within the meaning of the Act.
Any other information relating to the viability of the proposed institution or other matters which the applicant may consider relevant.
Any other information which the Central Bank may request the applicant to provide.

Note: The following classes of licenses apply.

Class 1 - Commercial bank.
Class 2 - Post-office savings bank.
Class 3 - Merchant bank.
Class 4 - Mortgage bank.
Class 5 - Credit institution.
Class 6 - Acceptance house.
Class 7 - Discount house.
Class 8 - Finance house.

Office Locations & ContactsEdit

Uganda Registration Services Bureau - Head Office,
Uganda Business Facilitation Centre
Plot 1 Baskerville Avenue,
Kololo,
Kampala
Toll Free: 0800 100 006
Call Center: +256 417 338 100
Phone: +256 414 233 219 / 0417338000
Fax: +256 414 250 712
Email: [email protected] (General Correspondences)
Email: [email protected] (For Enquiries)
Website:Link
Bank of Uganda - HEAD OFFICE,
Physical Address:Plot 37/45
Kampala Road
Kampala, Uganda
Postal Address: P.O Box 7120,
Kampala, Uganda
Telex: 61059
Telephone numbers: +256-414-258-441/6
Fax: + 256-41-4230878 , +256-41-4233818
Email: [email protected]
Website: Link

EligibilityEdit

Any person is eligible to make an application to run a financial institution in Uganda.
This application allows a person to operate a financial institution in Uganda.
In Uganda no person shall, operate a financial institution in Uganda unless authorized by Central Bank.

FeesEdit

Application fee:

Banks - 1,000,000 Ugx
Non-bank - 500,000 Ugx

Annual Licence Fees:

Fee prescribed from year to year by the Central Bank by notice.

ValidityEdit

A Licence issued under this institution is valid for one year and expire on 31 December every year.

Documents to UseEdit

Sample DocumentsEdit

Please attach sample completed documents that would help other people.

Processing TimeEdit

Maximum Processing Time: 6 Months.

InstructionsEdit

Pay the licence fee prescribed by the Central Bank within fourteen days of receipt of the notice of decision to licence the applicant.
Any material changes, such as in the composition of directors or board members, directors, officers or shareholders, or in the capital structure while the application is being processed or after the granting of a licence but before commencement, shall be duly notified to the Central Bank as soon as possible.
A licence granted shall at all times, be displayed in a conspicuous place at the head office of the concerned financial institution, and copies of it shall be similarly displayed in a conspicuous place at each of its branch offices.
A financial institution shall not engage in any other business other than the business specified in its licence.

Required InformationEdit

Name of applicant
Head/ Main office
Physical and postal address of head office/ proposed new outlet
Date of incorporation
Form of incorporation
Description of the applicants business or functions
Certificate of incorporation Number
Details of subsidiaries and affiliates (Name of Outlet, County, City/Town, Street, Building, Date opened)
Particulars of shareholders (Name, Nationality, Date of acquisition, Amount of shareholding, % of shareholding)
Particulars of directors (Name, Nationality, Date of appointment, Level of education)
Particulars of the officers in the order of seniority (Name, Designation, Nationality, Date of appointment)
Ownership profiles
Shareholding in any other financial institution
Name of applicants external auditors
Declaration

Need for the DocumentEdit

The applicant need this document in order to legally establish a financial institution in Uganda.

Information which might helpEdit

Every financial institution shall ensure that the Central Bank is notified of every proposed appointment of a director.
Notification shall be accompanied by the chairperson’s declaration.
A person intending to become a director of a financial institution shall notify the Central Bank in writing of his or her proposed appointment by submitting a personal declaration form.
Every financial institution shall submit a personal declaration form for each subsequent proposed director.
A proposed director shall not assume any duties in a financial institution without approval of his or her appointment by the Central Bank.

The applicant shall ensure that there are no factors, such as unavailability or inadequacy of information and lack of transparency, which may hinder the conduct of investigations after the submission of its application or inhibit effective supervision after the issuance of a licence.
The applicant shall include detailed financial projections which demonstrate medium-term viability and sufficient information on the financial resources of the founders to support the institution;
The applicant shall describe how the institution is to be organized and controlled internally and shall include a description of comprehensive risk management systems for credit, liquidity, foreign exchange, interest rate, operational and other risks; and
The Applicant shall disclose the applicant’s current and contemplated future policy with regard to the payment of dividends.

External LinksEdit

OthersEdit

More information which might help people.