Special Prosecutor begins probe into banking sector crisis

The Office of Special Prosecutor has announced it has begun investigations into the banking and financial sector crisis.

A statement issued by the Special Prosecutor Kissi Agyabeng said his office has commended full-scale investigations into the matter.

The statement further asked the general public with any information on alleged corruption and corruption-related offences in the banking crisis to inform the OSP or lodge a complaint against any official in that regard.

It assured such persons of their protection.

Background

Background

A total of 16 universal banks were collapsed within two years as part of measures taken by the Bank of Ghana to cleanse the banking sector to make it more robust.

The central bank in 2017 embarked on a comprehensive reform agenda to strengthen the regulatory and supervisory framework for a more resilient banking sector.

Some of the banks had their licences revoked, others were merged for their inability to raise the new 400 million-cedi minimum capital requirement as of December 31, 2018.

The BoG disclosed that some of the banks acquired their licences fraudulently and through the use of non-existent capital.

In the midst of the revocation of licenses and the collapse of these banks, the government established the Consolidated Bank of Ghana in which assets and liabilities of seven collapsed banks were transferred.

In all, seven banks- UniBank, The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank and Heritage Bank, have been consolidated.

Only 16 banks were able to recapitalised successfully while three merged with five banks receiving bailouts from the government.

One bank exited the sector voluntarily.

After the exercise, 23 universal banks remained from the previous 33.

Two banks: UT Bank and Capital Bank, were first taken over by GCB Bank in a purchase and assumption agreement.

Seven Banks: The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank and UniBank had their licenses revoked and placed under the Consolidated Bank of Ghana.

One Bank exit: The Bank of Baroda as part of its reforms willingly folded up operations in the country and exited.

Six Banks merged (3 mergers): First Atlantic Merchant Bank Limited and Energy Commercial Bank, OmniBank Ghana Limited and Bank Sahel Sahara Ghana and First National Bank and GHL Bank Limited reached merger agreements.

By: Rainbowradioonline.com/Ghana

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