Information in Uganda’s banking corridors indicates that Diamond Trust Bank could finally shut down following a series of scandals related to fraud.
“The most recent scandal that is threatening the DTB’s existence is a case in court in which the bank is accused of illegally withdrawing 120bn from several accounts belonging to Ham Enterprises. The money was withdrawn over a period of time without the customers consent. This had led to a legal battle, one that had led to scrutiny of the all the bank’s activities”, Uganda Times reports
It is reported that Ham Enterprises is not the only customer whose money has illegally been withdrawn.
In 2017, Francis and Stella Nekuusa took DTB to court over withdrawals amounting to UGX10 billion (KSh300 million). The bank, charged under suit no.784/2016 after committing the crime tried to take the couple’s properties.
Another customer named Yiga Musa (suit no.254/2017) filed a suit against the bank in 2016 after the bank took advantage of him not understanding and reading the English language. The bank made him sign many documents, including mortgages deeds with an intention of creating an illegal mortgage and making him a debtor and defrauded him of UGX 3, 500,000, 000 (KSh103 million)
Fraud in Kenya
The Bank’s fraudulent cases in Kenya speaks for itself. It is huge, as reported by Nyakundi
DTB Previously Survived Shutdown by Bank of Uganda:
Bank of Uganda Governor Emmanuel Mutebile once hinted that two banks in Uganda were on close watch.
“DTB is said to have been top on the list. With the ongoing scandals, Though silent, BOU is said to be reviewing is its position to take over the bank or shut it down.”
With such fraud scandals and Court Cases, DTB may be next on the list of the Closed/Defunct bank in Uganda since according to history, it is majorly fraud as is in Dtb that failed all the previously closed.
“Nearly all the banks we closed or sold in Uganda failed because of outright fraud by shareholders, excessive lending of funds to insiders – managers and shareholders, collusion to cover up irregularities between board of directors and the management, and misreporting of the true state of the bank’s financial position, among many factors”. Said Dr. Kasekende who further added that, “The Bank of Uganda only intervenes in a financial institution when it has reasonable belief and evidence that continued operations of that institution pose serious risk of loss to depositors’ funds”, When addressing the COSASE committee of Uganda Parliament in defense for the previously closed banks in Uganda.
Should DTB loses this yet to be determined Shs120Bn Fraud ongoing case as it has partially been with; the 30% deposit requirement , then the Bank is in much trouble as the regulator will have to intervene.
Rogue Diamond Trust Bank Yet To Refund Customer Millions Stolen Through Coordinated Insider Fraud
Analysts however recommend bank customers to make audit given the fact that the bank’s biggest customers have already been defrauded, “even small-time customers, who have maintained loan accounts for about 5 years are advised to carry out audits of their accounts to ascertain whether they have not fallen victim yet; Even those who save as low as 5000shs should check their accounts as this money could already have been withdrawn by the bank.”, urges the analysts.
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