All the reasons why the five local banks collapsed
The Bank of Ghana has explained the reason behind its revocation of the licenses of five local banks and the decision to merge them.
On Wednesday, the Central Bank announced that The Royal Bank, uniBank, Sovereign Bank, The Construction Bank and Beige Bank have been merged to form The Consolidated Bank of Ghana Limited.
The BoG subsequently appointed Nii Amanor Dodoo of KPMG as the Receiver for the five banks.
Source: Depositphotos
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According to Governor of the Bank of Ghana, Dr. Ernest Addison, all deposits of the five banks are safe and have been transferred to the Consolidated Bank.
Speaking at a press conference, he said the newly established Consolidated Bank “will act as a bridge bank pursuant to section 127 (11) of Act 930, to assume some of the assets and liabilities of the five banks”.
He said customers can still carry out their business as usual at their respective banks which will now become branches of the Consolidated Bank.
Also, he said, all staff of the merger banks will now become staff of the Consolidated Bank.
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Dr. Addison said the Central Bank rolled out such measures “to strengthen the financial system to protect the interests of depositors.”
YEN.com.gh bring you some of the reasons why the BoG collapsed these five banks to form the Consolidated Bank Ghana;
1. The Central Bank in their statement said Beige Bank, Sovereign Bank and Construction Bank all obtained their licenses under false pretense.
2. Also these five local banks breached the BoG's cash reserve requirement.
3. Unable to meet their daily obligations
4. Inaccessible paid up capital and declining loan portfolio
5. Over 89% of loans non-performing (uniBank)
6. Loans and advances were over stated
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Source: YEN.com.gh
