The Financial Institutions Act 2004, (as amended): its effectiveness in regulating commercial banking in Uganda
Odoo, Simon Peter
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Aims of the study The continued failure leading to the closure of more commercial banks yet after the coming into force of the Financial Institutions Act (FIA) 2004 which was amended and has rigorous governance.a standards, prompted the researcher to undertake this study. Research questions : (1) ”How effective is the FIA in regulating Commercial Banking in Uganda?” (2) Some commercial banks have failed and were closed after the coming into force of the FIA, was this due to weaknesses in the legal frame work or is it because of lack of proper supervision and regulation by the Bank of Uganda (BOU)? Methodology Basically qualitative methods including one-on-one in-depth interviews and key informant interviews were used for data collection. The study was conducted in Kampala where the BOU and the head offices of all commercial banks in Uganda are located. Purposive sampling techniques were used to select respondents from the BOU and commercial Banks. The main outcomes/results of the FIA 2004 (as amended): 1. Revised and consolidated the law pertaining to financial institutions. 2. Promoted the regulation, control and discipline of financial institutions by the Central Bank. 3. Reduced the rate at which commercial banks in Uganda were failing and being closed. Conclusion FIA has attained the core purpose why it was put in place, so it is effective.