The Bank of Ghana has consolidated five local banks into what it calls the Consolidated Bank Ghana limited.
The banks are Beige Bank, Construction bank, Royal bank, uniBank and Sovereign bank.
This means that the banks are merged.
According to the Governor of the Bank of Ghana, Dr. Ernest Addison, some the banks obtained their licenses through false means by presenting documents that painted a picture as though they could meet the new capital requirement.
“The government has recapitalized the consolidated Bank Ghana limited to take on… all liabilities of these five banks. The government has also issued a bond of GHc5.76 billion to cover the gap between the liability and assets assumed by the Consolidated Bank. The Consolidated Bank Gh. Ltd is expected to play a strategic role in the transformational agenda of the government,” he said.
Dr. Addison however assured clients of the affected banks that “your monies are safe.”
GHc400 million capital requirement struggle
The Bank of Ghana gave the banks in Ghana until the end of 2018 to raise a GHc400 million new capital requirement or risk being shut down or becoming a microfinance or savings and loans institutions.
Whereas the foreign-owned banks are not complaining, the local ones had asked the Bank of Ghana to give them some time to recapitalize.
They also petitioned the Presidency to intervene on their behalf.
But the central bank among other things advised them to join forces and recapitalize or risk having their licenses revoked.
The Governor of the Bank of Ghana, Dr. Ernest Addison about a week ago disclosed that some 15 banks are set to meet the new minimum requirement which meant that 19 others would have to resort to various options available to them in order not to miss the deadline.
GN, Sahel and Premium banks to merge
Three local banks — Premium, GN and Sahel Sahara banks have already agreed to merge.
The three banks according to reports, commenced the merger talks this year and finalized the deal this month- July 2018.
The deal is however yet to be approved by the central bank which has received the proposal.
If approved, it will be the first merger which will be undertaken by local banks as part of moves to meet the minimum capital bank.
Capital, UT bank collapse
The Bank of Ghana announced the collapse of UT and Capital banks about a year ago, allowing GCB Bank to take over the two insolvent banks.
In March 2018, the central bank again announced that indigenous bank; uniBank,was also on the verge of collapse, and was taken over, with audit firm, KPMG Ghana as the administrator.
Again, in May 2018, BoG announced the appointment of an adviser to directly supervise operations of Sovereign Bank which the central bank claimed faced governance and capitalization challenges.