The role of Bank Supervision is to ensure a safe and sound financial system for protection of depositors funds and conducive for macro-economic stability.
Banks Supervision is structured into two departments; Commercial Banking Department and Non-Bank Financial Institutions (NBFI) Department. Commercial Banking Department is charged with the supervision of commercial banks while NBFI supervises credit institutions, Micro Deposit Taking Institutions and other non-bank financial institutions under the mandate of Bank of Uganda.
The mandate of supervising financial institutions is derived from the Financial Institutions Act 2004, the Micro-Deposit Taking Institutions Act 2003 and the Bank of Uganda Act 1993.
Bank Supervision cannot entirely stop financial institutions from failing. Reasons for failure are diverse including among others internal weaknesses in financial institutions and systemic/external factors which are beyond the control of financial institutions. However, whenever, an institution is envisaged to fail, Bank of Uganda endeavours as much as possible to minimize the magnitude of loss by proactively winding up the operations of the distressed financial institution.