BoU drops financial card requirement in bank loan applications

The Bank of Uganda (BoU) has ordered that all people seeking to borrow money from commercial banks and other financial institutions will now be required to present their national identity card instead of bank card.

The Executive Director of Banking Supervision, Dr. Twinemanzi Tumubwine, in a circular issued on October 21, 2022, said that all new individual loan applications must be provided to Credit Reference Bureaus (CRBs) with an identification number national (NIN) as mandatory identifier. .

Dr. Twinemanzi explained that while financial institutions gave out financial card numbers for all credit applications (CAP) and credit borrower account (CBA) records, this limits access to financial services to a large part of the population.

“To promote financial inclusion and expand credit information sharing, Bank of Uganda is revoking the above circular with immediate effect. Accordingly, all participating institutions are to initiate a transition from financial card number to a NIN as a mandatory identifier for Ugandan citizens and other identifiers,” the circular read in part.

Dr Twinemanzi explained that in the meantime, all credit records of non-Ugandans must be provided to the CRBs with a combination of a refugee number, passport number or work permit number until the National Identification Regulatory Authority (NIRA) begins. issue of foreigner identification numbers.

“As of December 1, 2022, all loans to non-retail borrowers or legal persons licensed to do business in Uganda must be reported to the CRBs with a unique registration number issued by the relevant registration authority in accordance with laws Ugandans,” reads the circular.

“To avoid the risk of losing historical borrower profiles, there will be a transition period expiring on December 31, 2022. During this transition period, participating institutions are required to update individual borrower profiles or credit consumers with existing=retired credit facilities, with the unique identifier or applicable registration number previously prescribed in this circular,” he added.

Dr. Twinemanzi said that effective January 1, 2023, all Individual Credit Borrower Account (CBA) records will be provided with a NIN or other unique identifier duly issued by the relevant registration authority in accordance with Ugandan laws.

“Detailed guidelines on identifying and reporting borrowers should be included in the revised data submission manual and data validation rules,” he added.

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