By Elias Biryabarema
KAMPALA, Oct 14 (Reuters) – Uganda’s central bank said on Wednesday foreign-based banks do not need its license to lend funds originating abroad, reassuring an industry jolted by a court ruling last week that declared some syndicated loans involving foreign banks illegal.
The loans affected by the Commercial Court ruling represent at least $1.5 billion worth of debt, according to an industry body.
The Bank of Uganda said it did not regulate lending that involved “using funds obtained from foreign banks that do not take deposits from the public in Uganda.”
“Foreign banks lending deposits held in jurisdictions other than Uganda are regulated and supervised by their home authorities,” it said in a statement. “It is not mandatory for a foreign bank to establish a representative office in Uganda in order to conduct lending.”
The central bank’s position does not override the court’s ruling but it