Bank of Uganda Act

This section provides definitions of terms used in the Act, including "Bank", "Board", "currency point", "executive director", "financial institution", "Fund", "Governor", and "Minister".

The Bank's authorised capital is set at thirty billion shillings; the Government must subscribe it from time to time; Parliament may increase authorised capital by resolution; issued and paid-up capital must be at least twenty billion shillings; if capital is impaired the Government will furnish securities to the Bank.

The Board must determine a General Reserve Fund for the Bank from time to time; the Bank may transfer funds from that Reserve Fund to its capital in consultation with the Minister.

The Board may direct that all net profit be paid into the Consolidated Fund if the General Reserve Fund is at least twice the paid-up capital; the Bank may, after consulting the Minister, retain amounts payable into the Consolidated Fund to offset sums due to the Bank by the Government.

The shilling is the unit of currency; monetary obligations and transactions must be expressed, recorded and settled in shillings unless an enactment provides otherwise or the parties lawfully agree otherwise.

The Board must, in consultation with the Minister, prescribe the framework to determine the external value of the shilling.

The Bank may buy and sell foreign currency at market-determined rates, and the Board may determine the terms.

The Bank has the sole right to issue notes and coins and must arrange printing, minting, denominations, issuance/reissuance/exchange at Bank offices/agencies, and custody/destruction of printing/minting materials; the Government or any person must not issue currency or bearer tokens likely to be legal tender.

The Bank must determine the design of the bank notes it issues, and bank notes must not bear a portrait of a living person or any political symbol or word.

Bank must issue bank notes and coins in denominations (shilling or fractions in cents) determined by the Board with the Minister's approval; forms, designs and devices and coin weight/composition are to be determined by the Board.

Coins and bank notes issued by the Bank are legal tender (coins subject to tampering and denomination limits); the Bank may call in notes and coins after at least fifteen days’ Gazette notice.

A person is not entitled to recover from the Bank the value of lost, stolen, mutilated or imperfect bank notes or coins tampered with; the Board has absolute discretion to decide when and under what conditions such values may be refunded as a grace.

A certificate by the Governor or an officer of the Bank authorised by the Governor, certifying that a document purporting to be a bank note is an imitation (stating denomination and number and that it is not a note issued by the Bank), shall be received in evidence without further proof as conclusive evidence.

The Bank is exempt from liability to pay any stamp duty under the Stamp Duty Act for notes it issues.

Specifies appointment of Governor and Deputy Governor by the President on Cabinet advice; limits holding other offices while in office; allows certain activities with Minister/Board approval; permits resignation effective one month after Minister receives resignation letter.

The Board appoints executive directors, heads of departments and other officers; it makes employee appointments and lays down terms and conditions; employees are exempt from liability for losses except for their own default or wilful act; remuneration must not be computed by reference to the Bank's profits; employees acting in good faith are protected from legal proceedings.

Board members, officers and employees of the Bank must keep material information secret; former staff remain bound and may disclose only with the Bank's prior written permission or when required by court or law; aggrieved persons can appeal unreasonable refusals to the High Court; contravention is an offence punishable by a fine up to twenty-five currency points or up to five years' imprisonment, or both.

The Bank is exempt from paying income tax and profits or capital gains tax for its functions under this Act.

Financial institutions must not register (or be registered) under any law by a name that includes certain reserved words (for example: Central, National, Uganda, Ugandan, Reserve, State) unless they have written consent from the Minister.

The Minister may direct the Bank on financial and economic policy (after consulting the Governor and subject to the Act); may determine specific policy with Cabinet approval and the Bank must implement it while in force; and the Minister must lay any such directive before Parliament within fifteen sitting days.

The Bank must present an annual report to the Minister not later than three months after the end of each financial year; the report must include activities, procedures and policy information and a copy of the audited accounts. The Minister must lay the report before Parliament within three months after the end of the financial year.

The Board may make byelaws, with the approval of the Minister, provided they are not inconsistent with the Act, regulating specified service, establishment and benefit matters.

Creates offences for persons who contravene this Act, make incorrect statements in submitted documents, or give false replies; directors/managers/partners of a body are deemed to have committed an offence by that body unless they prove lack of knowledge or that they took all reasonable steps to comply.

The Minister may, after consultations with the Board, make regulations to carry the provisions of the Act into effect.

The Minister may amend Schedule 1 to this Act by statutory instrument with the approval of Cabinet.

The Bank may perform a range of banking operations including opening accounts and accepting deposits, granting short advances to financial institutions, issuing remittances, and undertaking purchase and sale of securities and currencies.

The Bank must fix and make public at all times its standard re-discount rate; the Bank may determine different terms, conditions and rates of interest for particular classes of transactions.

The Bank must keep external assets equal to at least four weeks' import requirements, in specified convertible forms, and must advise the Minister if reserve targets are likely to be missed.

The Minister may direct the Bank to advise the Government; the Bank must advise and inform the Government through the Minister, render services as determined by the Minister, and formulate monetary policy; the Government must seek advice and consult with the Bank.

The Bank may make temporary advances to the Government and local governments for temporary recurrent revenue shortfalls; the Treasury must identify and submit annual requirements; the Bank must operate within that requirement; advances must not exceed 18% of Government recurrent revenue; the Bank must not guarantee or make advances on Government's behalf except as required by section 34; the Bank must charge market rates unless the Board decides otherwise.

If the Bank considers the limits on bank credit or holding of securities to be exceeded, it must report on outstanding advances or holdings and causes and must continue reporting to the Minister at intervals not exceeding six months until rectified; while limits are exceeded the Bank may not grant additional financing.

The Bank may participate in development financing (via refinancing facilities, loan/grant management through commercial banks, or supervision), but shall not directly finance any development project except development funds established under section 29(6).

The Bank may provide clearing facilities, make regulations for clearing procedures, and allow commercial banks to participate in the clearing house on recommendation of the Uganda Bankers Association.

The Bank must seek cooperation with and cooperate with financial institutions, in performing its functions, to promote banking services, ensure high standards, promote consistent policies, provide clearing facilities on terms it determines, and vet directors.

The Bank may set minimum cash reserve balances, prescribe ratios and methods for computing them, impose incremental reserves up to 100%, and may impose penalties (0.1% per day) for deficiencies.

The Bank may, in consultation with the Minister, by statutory instrument prescribe limits, purposes, periods, security, interest rates and charges for investments, loans, advances, bills and promissory notes; prescriptions must have regard to prior customer commitments, take effect after a Bank-specified period of grace, not discriminate between financial institutions; and a financial institution that contravenes a prescription is liable to pay a fine not exceeding fifty currency points.

Financial institutions must furnish the Bank all information the Bank may require; the Bank may publish such information but shall not disclose affairs of an institution or customer without consent.

The Bank may appoint any financial institution to act as its agent.

The Bank's financial year is a twelve-month period from 1 July to 30 June of the following year.

The Bank's accounts must be audited at least once every financial year by the Auditor General or an auditor he or she appoints.

The Bank must, as soon as practicable after each quarter, make a quarterly return of its assets and liabilities; the return must be published in the Gazette and a copy submitted to the Minister. The Bank may also submit information to the Minister in a Board-determined form.