- The Bank of Ghana has announced it has taken over the management of private bank, unibank
- The BoG said unibank has persistently suffered liquidity shortfalls and consistently breached its cash reserve requirement
Following the Bank of Ghana’s announcement that it has taken over the management of uniBank, YEN.com.gh brings you seven key reasons why.
According to the BoG, it has appointed an administrator, KPMG, to handle affairs at the indigenous bank (uniBank).
Meanwhile, the central bank has assured customers of uniBank that their savings are safe, despite handing over management of the financial outfit to KPMG.
Here are seven key reasons why the Bank of Ghana took over uniBank;
1. uniBank persistently maintained a capital adequacy (CAR) ratio below zero (currently negative 24%), making it technically insolvent. This contravened the 10% minimum CAR required.
2. uniBank suffered liquidity shortfalls and consistently breached its cash reserve requirement. As a result, UniBank relied extensively on liquidity support of over GHS 2.2 billion from the Bank of Ghana over the past two years to meet its recurring liabilities.
3. uniBank conducted its credit administration in a manner that has jeopardized the interests of depositors and the financial sector as a whole.
4. uniBank failed to comply with a directive of the Bank of Ghana dated 26th October, 2017, under section 105 of Act 930, prohibiting the bank from granting new loans and incurring new capital expenditures.
5.uniBank failed to comply with several other regulatory requirements, including Lending to a number of borrowers in excess of its regulatory lending limit (single obligor limit).
6. uniBank was borrowing from the inter-bank market without the written approval of the Bank of Ghana when its CAR was less than the prescribed ten percent (10%), in breach of the BoG laws.
7. uniBank was outsourcing a number of services such as those of tellers, receptionists, and security, to affiliate companies without the prior approval by the Bank of Ghana, contrary to BoG Laws.
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