Finance Trust Bank downgrade: All you need to know

The Bank of Uganda has announced that Finance Trust Bank will change from a Tier I Commercial Bank to a Tier II Credit Institution starting April 1, 2026.

In a statement shared on X, the central bank said it has approved and is supervising the transition to protect depositors and customers and to ensure an orderly process.

A Tier I Commercial Bank is a full bank that offers a wide range of services. These include current accounts, overdrafts, inter-bank transactions and other complex services. A Tier II Credit Institution is still a deposit-taking bank but works under a narrower licence. It focuses mainly on taking deposits and giving loans.

The Bank of Uganda stressed that the change does not mean the bank is closing. Finance Trust Bank will continue operating and serving customers under the new licence.

The regulator explained that such changes are sometimes strategic. They allow a bank to match its business model to its target customers and to operate more efficiently.

After the transition, Finance Trust Bank will stop offering some services that only Tier I banks can provide. It will no longer run current accounts or issue new overdrafts. Existing overdrafts will continue until they mature. The bank will also leave the inter-bank market after its current placements mature.

However, the bank will still take savings and fixed deposits, give loans to individuals and small businesses, and buy and sell foreign currency.

It will maintain and open foreign currency accounts allowed under Tier II. It will clear cheques and process wire transfers through a third party. It will also continue trade finance services such as performance bonds and guarantees.

The Bank of Uganda assured customers that their money remains safe. It said deposits remain protected under Uganda’s financial laws and that the bank is adequately capitalised. The central bank added that it will continue to supervise the institution to protect depositors and maintain stability.

Customers will still access their money through branches, ATMs and digital platforms. Most account numbers will remain the same. The bank will inform customers in advance if any changes are needed.

All existing loans and contracts remain valid and legally binding. Interest rates will follow normal market and policy conditions, with customers notified of any changes.

Branch operations will continue and staff will remain in place. Customers do not need to close their accounts.

The transition period runs from January 1 to March 31, 2026. During this time, the bank will phase out products that need a Tier I licence, update systems and communicate with customers.

The Bank of Uganda said the move does not signal financial trouble. It described the shift as strategic repositioning. It reaffirmed its commitment to the safety, soundness and integrity of Uganda’s financial system.