This is necessary to create a level playing field for banks and to prevent regulatory arbitrage whereby banks aim to operate from the jurisdiction within the EAC with the weakest regulations. I mentioned earlier that the Bank of Uganda will advise the Minister of Finance to raise the minimum paid up capital requirement for banks.
It has, for example, become much more difficult for the Reserve Bank to control the money supply in a situation where so many foreign banks operate in South Africa, and where South African banks have so much easier access to financial resources from correspondent banks in the rest of the world.