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Stanbic bank defrauds customer of millions of shillings


A Ugandan working in Canada has requested the Standard Bank Group of South Africa to restrain its Ugandan subsidiary, Stanbic bank, from using tricks to steal his sh. 4,726,339.

Yunus Lubega accuses Stanbic of applying a ridiculous exchange rate to deduct the sum from Canadian dollars 14,980 he sent late July through the financial institution to a local recipient.

Whereas the Bank of Uganda recommended on July 26 sh. 2,390.51 for every Canadian dollar, argues Mr. Lubega, Stanbic decided to pay a mere sh. 2,075 for the same on the same day. This difference of sh. 315.51 on each dollar slashed the money from sh. 35,809,839 to sh. 31,083,500, which the bank credited to the recipient account, 0140060754101, held by former Kampala deputy mayor Dr. Hasib Kabuye Takuba.

This, in the eyes of Lubega, amounts to fraud in broad daylight that deprived him of a whole sh. 4,726,339 which, he says, Stanbic must refund. “Stanbic Bank (Uganda) has not convincingly explained why there would be such a sharp contrast between what it claims to be the actual value of the Canadian dollar against the Ugandan Shilling on June 26, 2012 and what all the other international foreign exchange tools did present for the same date,” writes Lubega in his August 9 letter to Standard Bank Group, a copy of which this news website has obtained.  

Stanbic, on the other hand, argues that it has the right to set its own exchange rates. “We wish to clarify that whereas Bank of Uganda may intervene to stabilize the Uganda shilling, it does not fix the exchange rates applicable in the market,” said Stanbic Legal Officer, Carol Luwaga, in a July 31 letter to the complainant – before the latter appealed to South Africa. “The Bank determines its rates depending on the market conditions and business considerations.”  

But Lubega maintains that no one has the right to thrive on ruthless exploitation. “I would like to note that in my 27-year experience [of] regularly wiring foreign currency to Uganda, this has never happened before.  Yes, fluctuations do happen here and there, but they never amount to hundreds (or, in this case, thousands) of dollars, certainly not on remittances of this size, and not when the Uganda Shilling was not doing that well against the Canadian dollar on June 26, 2012,” his letter reads in part.    

This is not the first time that Uganda’s largest and most crowded commercial bank has been accused of charging customers exorbitantly. The July – August 2009 issue of The Campus Journal carried students’ opinions on the convenience of the bank that was then a monopolist on university campuses. These are some of the views we recorded at Makerere University:

Mubatsi Asinja: “Of recent 300,000 was wired on my account. That same day I went to withdraw the money; it had reduced by [sh.] 20,000.”

Patience: “My sister sent me 200,000 shillings from Moyo. But on getting the money it was 150,000. I do not know where the [sh.] 50,000 went.”

 Mukiibi Ali Mivule: “Stanbic is unreliable. It is characterized by long queues and unrealistic monthly charges. This semester I had put tuition [fees] on my [savings] account but I have lost 10,000 unknowingly. These people have to reduce such charges to make our life easy.”

Unlike these aggrieved students who didn’t pursue their cases, Mr. Lubega insists the bank must return his money. “I therefore appeal to Standard Bank Group Limited to encourage its subsidiary, Stanbic Bank (Uganda), to reconsider its position on this matter and return UGX4,726,339 (i.e., CAD1,977) to the intended recipient, Dr. Takuba; for to insist on Stanbic Bank (Uganda)’s stance is to say that all universally reliable reference tools for foreign exchange rates are wrong,” his letter concludes.