Banks Under Fire: Minister Kasolo Demands Refunds for PDM Beneficiaries
In a significant development, the Minister of State for Microfinance, Haruna Kasolo Kyeyune, has issued an ultimatum to banks operating in the Teso Sub Region, Uganda. He has given them one week to refund fees that they allegedly charged Parish Development Model (PDM) beneficiaries during the process of opening bank accounts.
Minister Kasolo’s directive comes as a response to widespread grievances voiced by PDM beneficiaries who claim they were subjected to excessive charges by banking institutions while handling PDM funds.
The crux of the issue lies in the reported demands made by these banks on PDM beneficiaries. Allegedly, beneficiaries have been required to pay fees for account opening, affidavits for changing signatures, and withdrawals of PDM funds at the bank counter, all while retaining a minimum balance of more than five thousand shillings in their accounts.
One such incident occurred in Serere, where PDM beneficiaries informed the Minister that certain banks, such as Finance Trust Bank, charged them 10,000 Shillings for account opening, 3,000 shillings for passport photos, 20,000 shillings for affidavits, and between 15,000 to 20,000 Shillings for withdrawing PDM funds at the counter.
Minister Kasolo asserts that these charges are unlawful. He points to the fact that the government had entered into a Memorandum of Understanding (MoU) with the banks responsible for managing the PDM program. Under this agreement, banks were obligated to open accounts and facilitate cash withdrawals for PDM beneficiaries at no cost. The MoU emphasized minimal charges on PDM funds to ensure that beneficiaries could access the full amount meant for them.
Minister Kasolo has highlighted the extent of the issue, citing that in Kumi district alone, approximately 946 million shillings were lost to banks due to various charges levied on PDM beneficiaries. He has called upon the Resident District Commissioners (RDCs) to compile a list of PDM beneficiaries who may have fallen victim to alleged extortion by banks in the Teso sub-region.
Juliet Ijangolet, an official working with Finance Trust Bank in Soroti, clarified that the charges imposed on PDM beneficiaries were discussed and explained at the outset of the PDM program in Serere. Regarding the 20,000 Shillings fee for affidavits, Ijangolet explained that this money was paid to lawyers who assisted with signature changes when there were disparities between the thumbprints on beneficiaries’ National Identity Cards and the signatures they provided. It was meant to cover legal costs incurred in such cases.
According to Ijangolet, the money collected for affidavits from 12 beneficiaries was refunded through the Labor LC3 Chairperson, Harunah Onai, following complaints from some leaders. However, Onai clarified that he returned the money to the bank when the beneficiaries refused to claim it from his office.
“Not all individuals paid the 20,000 Shillings. Those who did understood the conditions under which they were paying. But some people, not necessarily those who paid the money, lodged complaints, prompting the bank to issue refunds. When the money was brought to my office, only one person claimed their share, while others advised me to return the money to the bank to facilitate access to their PDM funds. Subsequently, their accounts were reactivated, and they are now awaiting their funds,” explained Onai during a phone conversation.