Official administrators of the troubled private bank, Unibank, yesterday began work, an official release said.
The central bank declared on Tuesday, March 20, 2018 that the indigenous bank was insolvent and tasked KPMG as administrative managers in a bid to save the bank from collapse.
In a release issued yesterday, the administrators stated that operations would resume at 12 noon at all branches, but added that “from today, Thursday 22 March , 2018 the bank will open for business at the normal operating hours.”
The managers urged all customers and stakeholders of the bank to remain calm.
“The bank will continue to operate as normal,” the statement said.
Meanwhile, the powers, functions and responsibilities of the shareholders, directors and key management are suspended with the appointment of KPMG as administrators.
The responsibilities of KPMG include but not limited to: Safeguarding the assets of the bank, Securing depositors’ funds; Saving the bank and contributing to the overall stability of the financial system.
“We wish to emphasise that the bank is in full operation and depositors’ funds are safe and intact,” the statement said.
BoG last Tuesday explained that the appointment of the Official Administrator had, therefore, become necessary due to the fact that uniBank has, among other things: persistently maintained a capital adequacy ratio (CAR) below zero (currently negative 24%), making it technically insolvent.
“This contravenes section 29 of Act 930 which requires a minimum CAR of 10% to be maintained at all times, persistently suffered liquidity shortfalls and consistently breached its cash reserve requirement.
“As a result, uniBank has relied extensively on liquidity support (over GHS 2.2 billion) from the Bank of Ghana over the past two years to meet its recurring liabilities.
Among other things, a key shareholder of the bank managed to obtain liquidity support from the Bank of Ghana using third-party banks as its agents. The Bank of Ghana’s exposure to the bank was therefore underestimated by nearly GHS 400 million, as this amount was not reflected in its books”, the statement said.
The statement further stated that uniBank conducted its credit administration in a manner that had jeopardized the interests of depositors and the financial sector as a whole.
“They further failed to comply with a directive of the Bank of Ghana dated 26th October 2017 under section 105 of Act 930, prohibiting the bank from granting new loans and incurring new capital expenditures, failed to comply with several other regulatory requirements, including: Lending to a number of borrowers in excess of its regulatory lending limit (single obligor limit) under section 62 of the Banks and SDIs Act, 2016 (Act 930); borrowing from the inter-bank market without the written approval of the Bank of Ghana when its CAR was less than the prescribed ten percent (10%), in breach of section 66(1) of Act 930, outsourcing a number of services such as those of tellers, receptionists, and security, to affiliate companies without the prior approval by the Bank of Ghana, contrary to section 60 (12) of Act 930 among others”.
Story: News Desk