November 13, 2011 (JUBA) - Nile Commercial Bank has reopened in Unity state and will begin refunding money lost when the bank collapsed in 2008 due to bankruptcy.
Earlier this month the bank reopened in Rumbek, the capital of Lakes state, giving 6,000 customers access to their money, after the bank was bailed out by the South Sudan Central Bank.
The manager of the Nile Commercial Bank (NCB), Daniel Mabor Machol, told Good News Radio on Friday, that the bank had been open for a week and was in the process of searching out its former clients.
Speaking to Sudan Tribune on Saturday in Bentiu, the Unity state capital, Mabor encouraged people to use the services of the bank again, which include savings and current and fixed deposit accounts. He said that before the collapse, Bentiu had been NCB’s best branch and customers were very happy the bank had reopened.
“We first target to empower the people of South Sudan, give them money, give them all services and NCB [will] deliver better services,” said Mabol.
However, reaction on Bentiu’s streets was not as positive, with many people still unsure that the bank could be trusted with their money.
RUMBEK BRANCH REOPENS
In late October Nile Commercial Bank resumed services in Rumbek, providing services such as money transfer services, as paying people the money they have not been able to access since the bank’s collapse.
The transfer service will mainly benefit South Sudanese traders, students and families in Uganda who will be pay the money in South Sudanese Pounds into the NCB in South Sudan allowing the amount to be collected in US dollars in Uganda, Radio Good News reported.
Before the NCB was reopened, the Kenya Commercial Bank (KCB) enjoyed a monopoly in Lakes state, according to Radio Good News, ’handling all the banking transactions for the local government institutions, Non-Governmental Organisations and other civil society organizations besides those of the ordinary citizens.’
Mabor told Sudan Tribune earlier this month that the bank had changed its systems to prevent it collapsing in the future, encouraging South Sudanese to open an account.
“Anyhow, we are sure of ourselves," Mabor explained, "because it is not first time [a] bank could collapse. Even in America some banks collapse and again they retain their power to work. So we are restarting now, changing our system such that [...] we will not collapse again."
It is believed that the NCB’s financial crises was in part caused by the large loans taken out by many South Sudanese government officials, as well as the global financial crisis.
In April 2009 NCB announced it was been unable to honor withdrawal requests from its clients who have deposited their own salaries.
Bank officials pointed fingers at some officials at the Government of Southern Sudan saying they are to blame for the cash shortage.
At the time, the NCB branch manger in Juba, Marta Michya told Sudan Tribune that some senior South Sudanese officials borrowed a “huge amount of money but failed to repay.”
The NCB official added that some of the money has been loaned out to some of these officials without proper collateral.
It is unclear whether this money has been repaid of the bail funds from Sudan’s Central Bank have in effect wiped the slate clean.
In 2009 South Sudan and Sudan were having financial problems due to a decline in oil revenues.
The Nile Commercial Bank (NCB) was officially opened in 2002, despite the ongoing civil war between the Sudan People’s Liberation Movement (SPLM) and the Khartoum government, making it the first home-grown South Sudanese financial institution.
The following year the NCB’s head office was established in Yambio, in Western Equatoria state and later on was moved to Rumbek, which was the headquarters of the SPLM for much of the civil war.
After the Comprehensive Peace Agreement was signed in 2005, the bank was moved to Juba, which became the capital of the region. In July this year, South Sudan became independent from the north, following a referendum agreed in the peace deal.
Shortly after independence, the South Sudanese Pound (SSP) was launched and is now the official currency of the new country.
Banks in South Sudan operate a western system of banking where interest is permitted. In north Sudan, which is governed by Shari’a Law, Islamic banking is enforced by the government.