The Governor of the Bank of Ghana (BoG) has disclosed the reasons for the solvency of the five banks which have been taken over.  

Dr Ernest Addison revealed at a press conference Wednesday that three of the five banks obtained their banking licenses by false pretenses.

Beige Bank, Construction and Sovereign Bank’s licences “was obtained by false pretences through the use of suspicious and non-existent capital,” he said.

Below is the reason behind uniBank's closure:

The BoG said: “uniBank and Royal Bank were identified during the AQR update in 2016 exercise to be significantly undercapitalized. The two banks subsequently submitted capital restoration plans to the Bank of Ghana.

"These plans, however, yielded no success in returning the banks to solvency and compliance with prudential requirements. The Official Administrator appointed for uniBank in March 2018 has found that the bank is beyond rehabilitation.

“Shareholders, related and connected parties had taken amounts totaling GH¢3.7 billion which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio. In addition, amounts totaling GH¢1.6 billion had been granted to shareholders, related and connected parties in the form of loans and advances without due process and in breach of relevant provisions of Act 930. Altogether, shareholders, related and connected parties of uniBank had taken out an amount of GH¢5.3 billion, constituting 75 percent of total assets of the bank.”

Watch the video below: