Bank of Ghana accused of deliberately collapsing local banks

The Bank of Ghana’s merger of five local banks is deliberate to collapse huge local banks, the Member of Parliament for Bolgatanga Central has said.

According to Isaac Adongo, the merger was highly unnecessary and is in bad taste for fledgling indigenous banks.

On Wednesday, August 1, 2018, the Bank of Ghana announced that it has merged five local banks to form an all-new bank called the Consolidated Bank of Ghana Limited.

The merged banks are The Royal Bank, Sovereign Bank, The Construction Bank and Beige Bank.

Governor of the Bank of Ghana, Ernest Addison, has also explained that 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”.

But reacting to the move, MP for Bolgatanga Central, Issac Adongo, said the explanations coming from the Central Bank do not add up.

According to him, the Bank of Ghana is deliberately collapsing local banks “in order to manage expectations of players in the industry.”

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“You have KPMG write a letter that indicates that there is a hole of GH¢5.7billion in Unibank alone. The governor of the Central Bank announces that the government has issued a bond of GH¢5.6billion,” Mr. told Accra-based Starr FM.

“What it means is that that GH¢5.6billion is not even enough to cater to Unibank. So, what is the hole in Beige bank? What is the hole in Construction Bank? What’s the hole in The Royal Bank? So cumulatively, what’s the deficit we are looking at? So, what are you merging? Empty bank, with serious liquidity gap without any funding?

“So clearly…this is an administration in disguise announcing the fiscal cost of dissolving these banks in order to manage expectations of players in the industry. And I want to tell you emphatically, a culmination of regulatory collaboration to bring bigger industry players on their knees,” he added.