Here's how the Minority reacted to takeover of UT, Capital Banks
The Minority MPs want the Finance Minister and the BoG Governor to be hauled before Parliament over the matter. Check out the rest of their demands.
The Minority spokesperson on Finance, Cassiel Ato Forson believes that the Minister of Finance, Ken Ofori Atta and Governor of the Bank of Ghana, Dr Ernest Addison must be hauled before Parliament to answer questions on the matter.
The Minority also wants the assurance that “depositors will suffer no loss” following the development.
UT Bank and Capital Bank have been taken over by GCB Bank. The licenses of the two banks have also been revoked.
According to the Central Bank, it “revoked the licences of UT Bank Ltd and Capital Bank because of the “severe impairment of their capital.”
Below is the full statement from the Minority:
MINORITY STATEMENT ON THERECEIVERSHIP OF CAPITAL BANK AND UT BANKGood afternoon Ladies and Gentlemen of the press.Thank you very much for honoring the invitation at a very short notice We note that the BOG has approved a “purchase and assumption” (P&A) transaction between UT Bank, Capital Bank and GCB. This can be viewed as a relatively smooth takeover of the banks rather than the earlier speculation of a simple and forced liquidation which would have had a devastating effect on the economy.The P&A transaction follows other precedent approaches that had been used to deal with difficult banking situations in the country, for example, the setting up of the Non-Performing Assets Recovery Trust (NPART), and the winding down of the Bank for Credit and Commerce (BCC) , Bank for Housing and Construction (BHC) and Merchant Bank.We also note that during the press conference on the P&A transaction, the Governor of the BOG, assured the nation that the approach has a distinct benefit where customers will suffer no losses. The acquiring bank (GCB) will increase its market share while the productive financial assets of UT Bank and Capital Bank will be maintained.We take note the news and urge all depositors and customers of UT Bank and Capital Bank to exercise restraint while we patiently monitor the activities of the acquiring bank (GCB), BOG, and the receivers (PwC).
We strongly urge these three institutions, (BOG, GCB, and PwC), and the Ministry of Finance (MOF) that could assume any ultimate fiscal risks under the Banking laws, to ensure strict adherence to the distinct benefit of the purchase and assumption (P&A) transaction, so that no single depositor losses his or her investment. Needless to say, should this happen, it will result in an unforeseen burden on taxpayers instead of the original owners of UT and Capital Banks.Again, we urge BOG to ensure that the acquiring bank (GCB), which is the largest indigenous bank, with both public and private shareholders, is not overburdened unnecessarily with non-performing loans and impaired assets. We recall that the NDC Government, in recent past years, took a deliberate policy action to pay the TOR debt owed to GCB which helped to restore the Bank’s balance sheet to its current healthy status, and also not to interfere in GCB's operations. It is our hope that past and future transactions involved in this indirect liquidation will not be clouded in another secrecy, on grounds of “market sensitivity”.Ladies and gentlemen, it will be recalled that the NDC government introduced a number of structural measures that sought to strengthen the financial sector and to protect depositors. Notably among them is the Ghana Deposit Protection Act, 2016 (Act 931). This Act established the Deposit Protection Scheme (Insurance), the Deposit Protection Fund, and Deposit Protection Corporation. The Act seeks to protect depositors from potential losses resulting from the occurrence of an insured event. It is also to support the development of a safe, sound, efficient and stable banking system in Ghana. We urge the BOG to, as a matter of urgency, start implementing the provisions of this Act without further delay.
The NDC government also enacted the Specialized Deposit Taking Institutions Act, 2016 (Act 930) to facilitate the development of the financial sector, and provide an appropriate and robust legal framework to deal with emerging risk and vulnerabilities in the banking system. The Act addresses supervisory and regulatory gaps to enable the Bank of Ghana superintend over financial service providers in the micro-finance industry. The Act also ensures financial consumer protection, promotion of innovation, and financial inclusion.CONCLUSION: Ladies and Gentlemen of the media, we wish to end with two observations. First, it is important for BoG to further strengthen its supervisory and monitoring responsibilities. It is unimaginable to think that these two (2) banks had won several enviable awards at recent high profile ceremonies.The minority, as a matter of urgency, will be requesting, through the Rt. Hon. Speaker, that the Minister of Finance, and the Governor of Bank of Ghana be invited to brief Parliament about the development and to give assurance that the depositors will suffer no loss.We also urge Bank of Ghana to conduct an investigation as to what occasioned this development.Thank you.
SignedCassiel Ato ForsonRanking Member, Finance Committee of Parliament15th August, 2017
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