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Business News of Tuesday, 17 April 2018


Former Capital, UT Banks workers cry over unpaid entitlements

UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets

Some former workers of the defunct UT and Capital Banks say they are financially burdened following the failure on the part of Union of Industry, Commerce and Finance Workers (UNICOF) to pay their exit packages as agreed.

The exit package came about as a result of the termination of all employment contracts with the assumption of the two banks by GCB Bank.

Pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana on August 14, 2017 revoked the operating license of UT Bank Limited and Capital Bank due to severe impairment of their capital.

Almost a year to the revocation of the licenses, workers who were affected by the development are yet to receive their due.

“As per the Pensions Act 2008 (Act 766), Ghana operates a three tiered pension scheme. Under Tier 3, ex-Capital Bank had two voluntary contributions termed as Provident Fund (PF) and End of Service Benefits (ESB). It has been seven months since our banks were put under receivership but we have not been paid our Exit Package,” said the group in a press statement.

“To aggravate our plight, it is shocking that majority of the former workers of defunct Capital Bank, especially those who were not absorbed by GCB Bank and are currently unemployed have not been paid their Provident Fund (PF), and End of Service Benefit (ESB) under the Tier 3 Pension scheme. We will like to re-iterate for the records that the PF and ESB were funds contributed from our own salaries on monthly basis,” the statement added.

Vish Ashiagbor, Country Senior Partner for PricewaterhouseCoopers (PwC) who has been offering explanations as regards why the workers have had challenges with accessing their Providence funds and end of service benefits told Citi News that the workers had pledged such amounts for loans taken earlier from the banks.

“The only issue from the receiver’s point of view is that some of those workers had actually pledged their providence funds in exchange for loans from the banks. So that is where we come in; but ordinarily, provident funds and End of service benefits are not the duty of the receiver so to speak; only to the extent that you have taken a loan and have pledged it. Otherwise there is a fund manager who can deal with that in accordance with the fund rules,” he is quoted to have said.

In response, the workers said they “have not signed any such pledged form, neither was such a clause embedded in any loan offer letter to staff.”

The group is therefore calling on the government, Parliament, the Bank of Ghana, Joint Receivers and other relevant stakeholders to intervene and ensure that their entitlements are paid them.

Below is the full statement: