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Last updateTue, 15 Aug 2017 10pm

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BoG boss, Finance Minister must face Parliament – Minority

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The Minority in Parliament has requested that the Minister of Finance, Ken Ofori Atta and Governor of the Bank of Ghana, Dr Ernest Addison be hauled before Parliament to answer questions on GCB Bank’s takeover of UT Bank and Capital Bank.

The two banks, according to the Minority, will also be required to “give assurance that the depositors will suffer no loss” following the development.

Their request follows the Central Bank’s directive instructing GCB Bank to take over both UT Bank and Capital Bank over what it described as severe impairment of capital.

They also urged 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.”

GCB was authorized to take over the two banks because according to the Central Bank, they had “severe impairment of their capital.”

The collapsed banks were also “unable to develop an acceptable plan”, according to the Central Bank which indicated in a statement that it made efforts to help UT Bank and Capital Bank recover via private alternatives.

The list below tables the Minority’s demands following the collapse of the two banks

    We 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”.
    

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.

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