MPs Split Over uniBank Takeover

Members of Parliament are sharply divided on partisan lines over circumstances under which the Bank of Ghana (BoG) appointed KPMG to take over as Official Administrator for uniBank Ghana Limited in what is said to be a move aimed at saving the latter from imminent collapse.

Indeed, the Minority has hinted that the Finance Minister and the BoG Governor would be summoned to the House before it rises, to seek further clarification and detailed information on why uniBank was up for administration.

Whiles the Majority has hailed the takeover decision and said the step would protect the saving public, the Minority has said the move poses a threat to the future of indigenous Banks.

Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, maintained that the takeover will help sanitize the banking sector: “It is the proper thing for the BoG to do because if you are not careful and the bank goes under water, it is liquidated then I will have also lost my deposits at uniBank”

For him, most of these developments [bank collapse] are borne out of corporate management issues; “It is for my father so I am the Managing Director, they venture into things – DKM had airports, cement company, if you go into some of these things they have a lot that they are not well versed in”

He indicated that the BoG should have moved in a long time ago to rectify the situation.

“If they go along this path, every month another bank will go, another savings and loans, so they try to manage the system, they come to your aid, they inject liquidity- they offer you support, try to get you back on your feet”.

According to Dr. Assibey-Yeboah, the bigger stage in the banking sector will transpire in December 2018, when all banks will have to meet the new minimum capital requirement of GH₵400m, which he reckons will see some banks “going under water”.

He also explained that the receiver or administrator will go through a process, where people will have to pay for loans that they have contracted and in the event that it is found that directors have breached laid down principles for example a single obligor [you cannot lend so much to a single individual], you have to seek authorization from the Bank of Ghana, if all these processes are breached then it will attracts consequences.

“Absolutely if people have breached laws and the administrator comes to a conclusion that they be referred to the appropriate quarters, I think those will be done, but we haven’t gotten there yet” he suggested.

However, the Ranking Member on the Finance Committee, Cassiel Ato Forson, from the Minority side, disagreed and has expressed grave concerns about happenings in the financial sector.

Mr. Forson who could not understand why three indigenous Banks could collapse within eight months advised the Bank of Ghana (BoG) and government to ensure that it does not create opportunities for foreign banks to dominate indigenous the country’s financial sector.

“Government should make sure that going forward they don’t end up ceding the financial sector to foreigners because the way they are going they will end up ceding the financial sector to foreigners, I don’t think that is good for this country.

It is not the way we want to go, because clearly when we create good economy and good environment, we want the ordinary Ghanaian to benefit, so what’s the point if we create a sound financial sector and the ordinary Ghanaian business man is not benefiting, so there may be issues” he stated.

Mr. Forson continued: “We believe that government has a responsibility in ensuring that there is indigenous Ghanaian participation in the banking sector, supervising the collapse of three indigenous banks within a spate of three months is shocking and alarming.”

He also indicated that in other jurisdictions, the state has come out to support these ailing banks and strongly believe that the government of Ghana could have acted better.

“The key point is simple, the cost in terms of how much you will need to resolve the issue in this financial sector is sometimes more costly than allowing the bank to operate and guiding them through corporate governance and giving them some liquidity support, he noted.

He also explained that, for instance, the tax payer is going to pay GH₵2billion for the purposes of the collapse of two small banks in the case of UT and Capital Bank representing about 1percentage of GDP.

“My concern is that this will mean that going forward taxes are going to be raised and the proceeds are going to be used to service the debt.

In the case of uniBank, they are the size of the two banks put together [UT and Capital bank], in fact it is the largest indigenous private bank in Ghana and it has also gone down, so if the two put together is about GH₵2billion, then be ready to shoulder another burden of GH₵2billion, so two put together you are talking of GH₵4billion representing two percentage of GDP, so the tax burden is going to increase, the debt burden is going to increase for this country”.

Mr. Ato Forson, who was a former Deputy Finance Minister under the previous administration, also accused the Central Bank of cherry picking in the case of uniBank, since with the previous two banks [UT and Capital banks] it was not elaborate as this current one.

By: Christian Kpesese/ thePublisher