Minority Requests Bipartisan Probe Into Takeover Of UT & Capital Banks By GCB
| Updated Aug 15, 2017 at 7:18pm
Cassiel Ato Forson.
The Minority Caucus in Parliament is calling for a bi partisan investigation into the takeover of UT and Capital Banks by GCB.
The Ranking member on the finance committee, Cassiel Ato Forson says the full details of what occasioned the liquidation must be made clear.
He says the takeover must not be shrouded in secrecy with the excuse of being sensitive to the market.
Addressing a press conference in Accra today, Mr. Ato Forson told newsmen that the bipartisan probe will however, boost confidence in Ghana's financial market.
His comments followed the takeover of the two banks by the GCB Bank on Monday following an announcement by the Bank of Ghana it had withdrawn the licenses of the two banks which were struggling to operate financially.
Commenting on the development, Mr. Forson said: “These two banks had won enviable awards in recent high profile ceremonies. Therefore, we the Members of the Minority of this Parliament, as a matter of urgency, will be requesting through the Rt Honourable Speaker that the Minister of Finance and the Governor of the Bank of Ghana be invited to brief parliament about this development and to give assurances that depositors will suffer no losses.”
He added, “We are urging the government to, as a matter of urgency, institute a bi-partisan probe into what occasioned the rise and fall of these two banks. We think that this situation needs to be investigated so that if it is true that actions or inactions by owners and managers of these banks actually resulted in the banks collapsing, I believe that the state will have to take action.
“We call for a bipartisan probe and should be done immediately so that the people of this country will have some confidence in the banking sector to serve as a deterrent, going forward.”
Mr. Forson commended the Bank of Ghana for their proactiveness but cautioned the major players to ensure the customer doesn't suffer in the end.
Below Is The Full Statement:
For Immediate Release
MINORITY STATEMENT ON THE RECEIVERSHIP OF CAPITAL BANK AND UT BANK
Good afternoon Ladies and Gentlemen of the press.
1) Thank you very much for honoring the invitation at a very short notice
2) 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.
3) 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.
4) 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).
5) 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.
6) 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”.
7) 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.
8) 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.
9) 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.
10) 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.
11) We also urge Bank of Ghana to conduct an investigation as to what occasioned this development.
Cassiel Ato Forson
Ranking Member, Finance Committee of Parliament
15th August, 2017