Here are the reasons BoG revoked licenses of 5 indigenous banks

This was announced by the Governor of the Bank of Ghana Dr Ernest Addison at a press conference organised in Accra on Wednesday (August 1, 2018).

The 5 banks are uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited.

Below are the reasons why the license of each bank was revoked.

UniBank

• The bank was identified during the AQR update in 2016 exercise to be significantly undercapitalized.

• The plans for capital restoration did not yield any results

• The Official Administrator appointed for uniBank in March 2018 has found that the bank is beyond rehabilitation.

Royal Bank

• The bank was identified during the AQR update in 2016 exercise to be significantly undercapitalized.

• The plans for capital restoration did not yield any results

• Non-performing loans constitute 78.9 percent of total loans granted, due to poor credit risk and liquidity risk management controls

• A number of the bank’s transactions totaling GH¢161.92 million were entered into with shareholders.

Sovereign Bank Limited

• Bank obtained license by false pretences through the use of suspicious and nonexistent capital.

• The bank is insolvent and unable to meet daily liquidity obligations.

• Liquidity support granted so far to the bank amounts to GH¢21 million as of 31st July 2018.

• The bank has not been able to publish its audited accounts for December 2017, in violation of section 90 (2) of Act 930.

Beige Bank

• License obtained under false pretences

• Declining loan portfolio

• Breach of cash reserve requirement

• Construction Bank

• Licence obtained under false pretences

• Inaccessible paid up capital

• The initial minimum capital was provided by loans

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