The Bank of Ghana (BoG), the regulator of the banking sector in Ghana, has confirmed appointing an advisor for Sovereign Bank Ltd in April, 2018.
“The Bank of Ghana appointed an advisor to the Sovereign Bank Limited in April 2018. The Bank of Ghana did not previously publish notice of the appointment of the advisor, as it was done as part of its normal supervisory routine,” the Central bank said in a press release confirming earlier reports by JoyBusiness.
The regulator said, “Given the recent press reports on the bank, however, we find it necessary to release this press statement to clarify the issues on Sovereign Bank.”
Why the action?
Sovereign Bank was licensed by the Bank of Ghana as a universal bank in January 2016. As part of its supervisory functions, the Bank of Ghana completed an on-site examination of the bank's infrastructure and operations in December 2017.
"The outcome of the on-site examination revealed some governance and capitalization challenges which needed to be addressed," the statement said.
The Bank of Ghana has a range of powers under the Banks and Specialized DepositTaking Institutions Act of 2016 (Act 930) to take prompt remedial action to address supervisory concerns it identifies in a regulated institution.
One of such powers is to appoint an advisor under section 101 (1) of Act 930, that will advise and steer the management of the distressed institution.
Consequently, the Bank of Ghana appointed an advisor in April 2018 to advise the management of Sovereign Bank Limited.
What will be the job of the advisor?
The Central Bank said, “The Advisor is expected to help monitor the bank’s recapitalization efforts and implementation of governance reforms agreed with the Bank of Ghana."
The Advisor will stay in the bank until otherwise advised by the Bank of Ghana, and will furnish the Bank of Ghana with a status report on the bank as frequently as the Bank of Ghana may require.
The advisor, unlike an official administrator, does not take over the powers, responsibilities, and duties of the bank’s shareholders, directors, or management. Under Act 930, the Advisor may attend meetings of the Board of Directors without voting at such meetings.
“The Bank of Ghana takes this opportunity to assure depositors and customers of Sovereign Bank Limited that Sovereign Bank remains open for business under the control of the bank’s own management and that customers’ deposits are safe.
"The Bank of Ghana remains committed to promoting a strong and resilient banking sector that retains the trust and confidence of the general public,” the statement concluded.
Earlier, JoyBusiness reported that the Bank of Ghana (BoG) had appointed an advisor to directly supervise operations of Sovereign Bank.
JoyBusiness understand the regulator took the action because it was not happy with the state of affairs at the Bank.