We gave UT Bank, Capital Bank two years to turn things around - BoG

We gave UT Bank, Capital Bank two years to turn things around - BoG

- The Central Bank explained that the takeover was a last resort after all other options had failed to produce desired results

- GCB Bank was reportedly one of three banks considered for the takeover

Get the latest news in Ghana

Ghana’s central bank, the Bank of Ghana (BoG) has explained the rationale behind the forced takeover of two local banks, UT Bank and Capital Bank by GCB Bank.

Bank of Ghana discloses the reason why GCB took over UT Bank and Capital Bank

Dr. Ernest Kwamina Yedu Addison, Governor of the Bank of Ghana

READ ALSO: Black Stars escape terrorist attack

According to the BoG, the prime reason for the action was as a result of the worsening state of operations at the two banks.

This, according to the central bank, was compounded by the fact that the banks have been supported by the central bank for about two years now.

The continuous support was premised on the hope that the fortunes of the two banks would experience a turnaround.

The central bank, at a press conference on Monday August 14, 2017, revealed that the two banks were asked to present viable options aimed at reviving their operations, but all was to no avail.

READ ALSO: We would inform the accreditation board if we need their services-NDC

It also revealed that a bailout was considered, but later rejected on the basis that aside being an expensive course of action, the BoG would have been compelled to manage both banks.

As a result, the central bank had no option than not resort to a forceful takeover.

The new development, which is in line with section 123 of the new Banking Act, also make provision for the appointment of a receiver, and as such PricewaterhouseCoopers (PwC) was selected to play the role.

GCB Bank would therefore take charge of the good assets of both banks, whilst the receiver takes the bad assets.

The central bank has meanwhile hinted of a forensic audit into the operations of the acquired banks.

Do you have any stories to share with YEN? Get featured! We are available on Facebook and email via info@yen.com.gh

Source: Yen.com.gh

Related news
Mailfire view pixel