KAMPALA- Bank of Uganda (BoU) has assured the public that the future of banking services will remain in the hands of financial institutions supervised by it despite the rapid growth in mobile services facilitated by the telecommunications companies.
BoU’s assurance clears confusion that big telecommunication companies such as MTN, would become the largest bank in Uganda, since most payments are now conducted via mobile phones.
The pace of Mobile banking has surpassed the traditional banking with many people preferring mobile payments by means of telecommunications networks since it is cost effective and convenient to them.
However, BoU’s director board affairs, Mr Mackay Aomu, says it is the licensed financial institutions by the Central Bank under the Financial Act, 2004 or a Micro Finance Deposit-Taking Institution (MDI) licensed under the Micro Finance Deposit-Taking Act, 2003 who will continue conducting banking services in the country.
Mr Aomu who was discussing a paper on Mobile and Agency Banking the Bank of Uganda in Uganda last week on Thursday, said: “The future of banking is with the financial institutions not the telecommunications companies despite rapid growth in mobile banking money payments the country is witnessing.”
Mobile Money service was introduced in Uganda in 2009 with six companies now conducting mobile money services.
Since the introduction of mobile money services, there has been tremendous growth in the number of mobile money accounts, and volume of transaction conducted via mobile payments.
This development has seen BoU coming up with guidelines which became effective on October 1, 2013 to ensure safety in mobile money services.
Mr Aomu said as per the guidelines, the telecommunication providers are not allowed to take deposits like licensed financial institutions. “Bank of Uganda is in charge of approval and supervision of Mobile Money Services and it can issue directives regarding mobile money operations, while UCC is responsible for licensing and supervision of mobile network operators,” he said.
SOURCE: Daily Monitor