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Business News of Monday, 14 August 2017

Source: classfmonline.com

GCB takeover of UT, Capital banks good move – Gastsi

An economist, Dr John Gastsi, has said the decision by the Bank of Ghana for GCB to take over UT and Capital banks is a shrewd decision.

According to him, the timely decision will protect the integrity of the banking sector and also the customers of these banks.

GCB Bank Limited, on Monday, 14 August 2017 took over transfers of all deposits and selected assets of UT Bank Ltd and Capital Bank Ltd as the two banks were struggling to operate financially.

A statement issued by the Bank of Ghana on Monday August 14 said: “The Bank of Ghana has approved a Purchase and Assumption transaction with GCB Bank Limited that transfers of all deposits and selected assets of UT Bank Ltd and Capital Bank Ltd to GCB Bank Ltd. The Bank of Ghana has revoked the licenses of UT Bank Ltd and Capital Bank Ltd. This action has become necessary due to sever impalement of their capital. The remaining assets and liabilities will be realised and settled respectively through a receivership process to be undertaken by Messers Vish Ashiagbor and Eric Nana Nipah of PricewaterhouseCoopers.

“The main offices and braches of UT Bank and Capital Bank will be under the control of GCB Bank and will be opened at 1 PM today for normal business transactions.”

Speaking on this development in an interview with Jonas Ofori Yeboah on the 505 programme on Class 91.3FM on Monday August 14, Dr Gastsi said: “These are supposed to be distressed banks that have been taken over by the orders of the regulator. The purpose is to stop the spread of the risks that the banks are posing in the system and also to protect customers and ensure the integrity of the market. So if you look at it from this perspective, that is good.”

He added: “If you are very close to the banking sector, you will know that some of these banks were having serious difficulties, especially UT bank. I think over the past two years, we have not had any access to their annual reports which actually is a requirement by listed companies.”