Diamond Trust Bank (DTB) has for some time been mired in controversy. Stories of the bank defrauding its customers, and its employers running off with money have been a mainstay in financial columns.
The most recent scandal is of the bank making an unauthorized withdraw of sh100bn from one of its big customers’ account. The matter is currently in court.
The scandal has exposed more rot in the financial institution. This website has unearthed exclusive information indicating that the bank is currently operating largely on customers’ deposits with its total assets valued at about UGX1.606 trillion (approximately US$438.574 million) with customers’ deposits making up UGX 1.200 trillion of that value. That means the bank only has equity of four hundred six billion
DTB was not started yesterday. It started in 1945, initially as Diamond Jubilee Investment Trust (DJIT)initially operatingas a community-based finance house, dedicated towards the extension of credit to the East African Ismail community and the mobilization of their savings. In 1965, DJIT was split into three entities, which occasioned the establishment of branches in the three East African countries; Uganda, Kenya and Tanzania.
In 1968, the rapid economic development of post-independence Uganda saw the founding of Diamond Trust Properties Uganda Limited. In 1972, Diamond Trust (Uganda) Limited (DTU) commenced operations as a non-bank financial institution.
It did not have a full banking license and could not accept deposits from the public. In 1997, the bank became a full-service commercial bank and was renamed Diamond Trust Bank (Uganda) Limited.
Twenty three years have since passed since it became a full-service bank, but its growth is still insignificant. In 2016, it survived being closed by Bank of Uganda due to undercapitalization. It was the second time the bank was threatened with closure. Between 1972 and the early 1990s, while it was still DTU, it was declining, albeit largely due to political instability.
Yet it has managed to sail through all those storms, endless fraud by the bank and the revelation that it is largely operating on customers’ deposit may sweep it to the ground. Customers will find it hard to trust the bank owing to the fact that it is a foreign bank whose shareholders have failed to invest or show development in Uganda. In the event that it closes shop, a foreign bank will go with customer deposits and assets without trace.
Even when the bank has been reported to have registered some profits, the bank reduced the amount of loans advanced to customers in 2018, to Shs534.18bn, from Shs623bn in 2017. The bank therefore repatriates a huge percentage of her profits without giving the benefit of loans to her customers who finance its operations.
It is plausible for one to believe that such banks only milks from Ugandans and doesn’t facilitate progress as a bank should. Yet after benefiting from Ugandans for a period of about 75 years, DTB would be expected do foster the development of Ugandan and her citizens, instead of defraud, and repatriate profits.
DTB has demonstrated that it only serves the interests of the Ismailis for whom the bank was originally created for. But shouldn’t the bank have done better considering that Ugandans are responsible for its existence all these years?
There are people who came to Uganda as immigrants but have since made Uganda a home and help take the country forward. Take an example Sudhir Ruparelia who was the founder of the now defunct Crane Bank Sudhir’s bank offered the most loans to Ugandans and the bank had the most assets. He has as an individual invested widely in Uganda, and employed many.
One would expect the proprietors of DTB to do the same, but alas!
The share holders of this bank do not hold Uganda at Heart.
They even hold zero investments in our motherland and neither do they even live here, they only wait for dividends on their bank accounts.
If they would only bring back, just 10% of what this motherland has given to them over time, this country would be far.
