This comes after the Speaker of Parliament Alban Bagbin formed a seven-member committee to probe the petition filed by Dr. Kwabena Duffour, and Prince Kofi Amoabeng following the Bank of Ghana revoking the license of uniBank and UT Bank respectively.
Bank of Ghana declines parliament's request to UT Bank and uniBank petitions
The Bank of Ghana (BoG) has declined a request by parliament for it to respond to some petitions brought before the house in relation to the collapse of UT Bank and uniBank.
The petition was laid by the Member of Parliament for Bawku Central Mahama Ayariga.
But in a letter to parliament from Bentsi-Enchill, Letsa, and Ankomah, their legal representatives, the BoG said the petitions brought before parliament were wrongly placed and as such, they would not respond or participate in any investigations being carried out by the legislative body.
The Central Bank noted that section 1 of the Bank of Ghana Acts provides that the BoG shall not be subjected to the control or direction of any person or authority in the performance of its constitutional and statutory functions.
In a petition to the legislators, Dr. Kwabena Duffour listed three key points he's seeking Parliament to investigate.
He said Parliament needs to
- Investigate the conduct of the Bank of Ghana in the takeover, the appointment of an Official Administrator of uniBank Ghana Limited, and the circumstances surrounding the revocation of the banking license of uniBank Ghana Limited:
- Direct the restoration of the banking license of uniBank Ghana Limited by the Bank of Ghana and the remedying of the harms done the shareholders’ property rights as a result of the conduct of the Bank of Ghana;
- Give any other directives that Parliament may deem appropriate.
Prince Kofi Amoabeng also requested the law-making body to:
- Investigates the conduct of the Bank of Ghana and the Ghana Stock Exchange for the revocation of UT Bank’s license and delisting the bank without due regard to the rules of Administrative Justice guaranteed under article 23 of the 1992 Constitution.
- Directs the restoration of the banking license of UT Bank Limited by the Bank of Ghana and the remedying of the harms done to the shareholders’ property rights as a result of the conduct of the Bank of Ghana.
- Gives any other directives that Parliament may deem appropriate.
The Bank of Ghana revoked the licenses of nine banks in its bid to clean up the sector. The BoG cited various reasons including capital adequacy ratio crisis, poor corporate governance, overexposure to related parties among others.
The Central bank in 2017 approved that the good assets of Capital Bank and UT bank be taken over by GCB Bank while it appointed Vish Ashiagbor of Pwc as receiver to make the most out of the remaining assets.
Barely a year on, the BoG revoked the licenses of five other banks – Unibank, Construction Bank, The Royal Bank, Beige Bank, and Sovereign Bank. Their good assets were merged to form Consolidated Bank, Ghana.
Some of the former owners have been contesting the BoG's decision. Notable among them is Unibank which was owned by a former Finance Minister, Dr. Kwabena Duffuor.
UT Bank collapsed
UT Bank was deeply insolvent, meaning that their liabilities exceeded their assets, putting them in a position not to be able to meet their obligations as and when they fell due.
The Bank of Ghana (BoG) indicated that to protect customers, the BoG decided to revoke the licenses of UT Bank under a Purchase and Assumption transaction.
Their licenses were revoked and at the same time, the BoG approved a Purchase and Assumption Agreement, which allows GCB Bank to take over all deposit liabilities and selected assets of both UT Bank.
These actions according to the BoG are in line with the provisions of section 123 of the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930).
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: