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Business News of Wednesday, 29 August 2018

Source: citinewsroom.com

We’re in partnerships, not mergers with commercial banks – Databank

Investment bank, Databank, has denied claims that it is merging with some commercial banks in the wake of the massive shake-up in Ghana’s banking sector.

It said its relationship with commercial banks was purely partnerships to serve its customers better and not an indication of an expected merger.

“We wish to therefore allay any concerns that the investing public, general public and our esteemed customers may have about the implications of our partnerships with the various commercial banks. It is in no way a consolidation nor a signal that Databank is merging with any commercial bank. That is not a part of our strategic vision currently. Our goal is to focus on our core mandate of providing investment solutions to Ghanaians,” it said.

In a statement signed by its CEO, Kojo Addae-Mensah, the company said: “sections of the general public are misinterpreting Databank’s relationships with its partner banks as part of the ongoing consolidation exercise of commercial banks (otherwise known as universal banks).”
In allaying fears that it could be affected by the Bank of Ghana‘s ongoing processes to cleanse the country’s banking industry which has led to the collapse of 7 local banks and the merger of some others, Databank said it “is not a commercial bank, and is therefore not part of the ongoing sanitization exercise taking place within the banking industry.”

“We are regulated by the Securities and Exchange Commission (SEC) and governed by the Securities Industry Act, 2016 (Act 929) and its regulations thereof. Commercial banks are regulated by the Bank of Ghana and governed by the Banks and Specialized Deposit Taking Institutions Act 2016, Act 930,” it indicated.

According to the investment company, its relationship with custody banks was in compliance with its operational regulations which compels it to hold deposits with a commercial bank in the capacity as a custodian.

“The investments that are deposited with an investment firm (e.g., Databank) must be held with a commercial bank, who will act in the capacity of a Custodian and who is independent of the investment firm. This is to ensure that client funds are not comingled with operational funds of the fund manager. When the investment firm (Databank) needs to make an investment on behalf of its clients, instructions are sent to the Custodian for the transfer of funds for the said investment,” it indicated.



On its relationship with collection banks, Databank said it had formed partnerships with Access Bank, Barclays Bank, GCB Bank, GTBank, Fidelity Bank, Standard Chartered Bank, UBA and Zenith Bank who serve as their collectors.

“Through these partnerships, Databank’s clients have access to over 470 bank branches across the 10 regions of Ghana through which they can top up their investments,” it explained.

The statement further explained that its relationship with GT Bank, a commercial bank is also to enable licensed Databank staff to be stationed at GT Bank branches to help customers set up investment accounts onsite.

“Through this partnership, clients can find Databank staff in 10 GTBank branches in cities like Accra, Ashaiman, Cape Coast, Tamale and Tarkwa, as well as the UBA branch on the KNUST campus.”