According to Section 3(a) of the Financial Institutions Act as amended in 2016, agent banking means the conduct by a person of financial institution business on behalf of a financial institution as may be approved by the Central Bank.
Agent banking is hinged on the Agent Principal relationship. Agency is a fiduciary relationship created by express or implied contract or by law, in which one party (the agent) may act on behalf of another party (the principal) and bind that other party by words or actions.
This relationship is legally recognized in Uganda under the Contracts Act, 2010.
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