The licence of Heritage Bank Ghana Limited has been revoked by the Bank of Ghana.
Heritage Bank was listed among six banks that failed to meet the new 400 million cedis minimum capital requirement but were going to receive liquidity support.
But in a somewhat surprised move, the central bank Friday revoked the Bank’s licence and approved a purchase and assumption agreement with Consolidated Bank Ghana Limited which was formed in August 2018 with five banks whose licences were revoked.
With the latest development, the Consolidated Bank is required to takeover liabilities and selected assets of the now defunct Heritage Bank.
Governor of the Bank of Ghana, Dr. Ernest Addison told a news conference Friday that the central bank “have had issues with the capital that was used to set up the bank” but declined to give details stating the issue with the bank is currently a subject of a court case.
“Heritage Bank among other things, obtained its banking licence on 4th October 2016 on the basis of capital with questionable sources. Furthermore the Bank was unable to meet the new minimum capital requirement of 400 cedis as of 31st December 2018,” Dr. Addison explained.
At the expiry of the December 31, 2018 deadline for all commercial banks in the country to recapitalize, only 16 banks had been able to secure the minimum capital of 400 million cedis.
Premium Bank licence revoked
In a related development, the licence of Premium Bank Limited has also been revoked and merged with Consolidated Bank.
Among other things, the bank was found to be insolvent as of 30th November 2018 with a capital adequacy ratio of debiting 125.62 per cent, Dr. Addison indicated.
The Governor noted that “the major shareholder is not fit and proper” per the country’s banking laws
He described the Premium Bank issue as an old problem, and that issues around it have been over flogged.
“If we were very fair, we would have shutdown Premium Bank in August 2018,” Dr Addison said but said merger processes started at the time. However, he said “the merger fell through”.
He said “The government of Ghana has issued a bond of in the face of 1.4 billion cedis to the Consolidated Bank to cover the gap between the value of good assets and liabilities of the two banks.
He assured depositors of the safety of their funds, stating they will have access to their funds anytime they want.
By Stephen Kwabena Effah|3news.com|Ghana