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Scandal: Diamond Trust Bank Cited In Shs100Bn Fraud, Depositors Fear For their Money

By Elite Reporter

Popular commercial bank Diamond Trust Bank (DTB) is embroiled in a number of scandals that risk sparking off a crisis in Uganda’s financial sector.

The banking sector is supposed to be the backbone of the financial sector and the economy at large but it seems commercial banks often times operate in a way that is detrimental to the development of the country.

This leaves Bank of Uganda, the regulator of commercial banks, with a tough job to do; not only to ensure that the financial sector is run well but also to protect depositors’ money.

Sometimes commercial banks are too smart in their fraudulent operations to be detected by the Central Bank, when defrauding unsuspecting customers by deducting varying amounts of cash from customers’ accounts.

Information reaching us from a Mole is that DTB Uganda irregularly, unlawfully and fraudulently withdrew approximately Shs100Bn from a yet to be named customer’s account.

The act portrays DTB as having failed to adhere to the Financial Consumer Protection Guidelines (FCPGs) that were issued by the Bank of Uganda to protect interests of a bank’s customers. This is by law illegal, hence the said transaction is illegal too.

It is alleged that DTB illegally and dishonestly debited the money without the customer’s consent and a court case that will likely taint the bank’s name is coming up for hearing soon. 

The case, according to the source, will go a long way in exposing commercial banks like DTB and the tricks they use to steal clients’ money.

“DTB is in some kind of trouble because of the huge sums of money it fraudulently debited from this client’s bank account. We are talking about almost Shs100Bn,” a source said, without divulging details, because the case is coming up for hearing in court.

“The customer is not relenting. This is not good for the financial sector at all. If DTB can treat a notable customer like this and take him for granted, how about the smaller ones?” The source added. 

It should however be noted that this will not be the first time DTB is embroiled in fraudulent loss of customers’ money. 

Various media reports in the recent past have named DTB Uganda in a number of cases in which the Bank misappropriated customers’ money.

In many cases, it has been an inside job orchestrated by guards, tellers and bank managers in high offices. 

However, it seems the case is not any different from DTB Kenya – it’s a tradition of sorts at DTB , whereby customers openly complained in the media that money is stolen from their accounts, but no measures were being put in place to curb the vice.

In November 2016, DTB confirmed that a branch manager in Malaba stole from the bank Shs345m while in July 2017 a family was embroiled in a court battle with DTB over a Shs10Bn loan.

The couple, through Kampala Associated Advocates (KAA), said they didn’t owe the bank any money since all the money DTB was accusing them of taking accumulated as a result of the Bank crediting their account without their permission, which, according to them, amounts to fraud.

It should be remembered that two security personnel stole over Shs1.4Bn while transporting it from DTB Kikubo branch to the Main Branch along Kampala Road before they were arrested.

With this kind of fraud happening at the bank, customers are left worried and questioning the safety of their cash deposits and dealings with DTB Bank. 

This mistrust in the past has led customers to withdraw their money from banks who have a history of losing customer deposits. 

“It is unfortunate that people we trust our money with are the same targeting to steal it.
 Banks have a habit of debiting small amounts of money which a customer cannot detect to enrich themselves. I had to quit using commercial banks,” says Eric Mwebaze who no longer keeps his money in commercial banks.

“I invest the money that I used to deposit in banks as savings. Sometimes I keep it and move it on mobile money. I am not about to trust my money with people whose objectives are different from mine,” Mwebaze added.

If commercial banks like DTB continue to harass their clients in such a manner, then customers have an alternative of withdrawing their money and use other platforms like mobile money, village SACCOS and investing that money in say real estate. 

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