The newly created Consolidated Bank which is the amalgamation of Unibank, Beige Bank, Construction Bank and Sovereign Bank may face issues with legitimacy as the right processes were not followed with its establishment by the Central bank, economist Professor John Gatsi has said.
According to him, the bank ought to receive Parliamentary approval before it could be recognised as a legal entity under the laws of Ghana.
“It is not good for the Central Bank to be overly participating in Commercial Banking Activity. It is wrong for government to create a new bank without approval from Parliament. There is a problem with the consolidation because the right processes were not done,” he told Francis Abban on the Morning Starr Thursday.
He urged banks who feel aggrieved by the decision of the Central Bank to go to court for redress.
“Anybody who thinks they’ve not been treated fairly or well can seek justice in court.
the Bank of Ghana announced the amalgamation of uniBank and four other banks into a new brand name – Consolidated Bank – after they were found to by struggling with liquidity issues.
Announcing the consolidation of the banks, the governor of the Central Bank Ernest Addison said, “To help ensure that the banking sector maintains a strong indigenous presence, the government has established a new bank called Consolidated Bank Ghana Limited which will act as a bridge bank pursuant to section 127 (11) of Act 930, to assume some of the assets and liabilities of the five banks. The Government has capitalised the new bank in the amount of GH¢450 million and the Bank of Ghana has issued it with a universal banking licence with effect from 1st August 2018.”
The Central Bank, he further stated “has also approved a Purchase and Assumption Agreement between Consolidated Bank and the Receiver for the five banks. Under the Agreement, Consolidated Bank has acquired all deposits and other specified liabilities, and good assets of the five banks. To finance the gap between the liabilities and good assets assumed by Consolidated Bank, the Government has issued a bond of up to GH¢ 5.76 billion.”
Source: Ghana/Starrfmonline.com/103.5FM
