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Parliament’s Finance Committee okays GH¢2bn sovereign guarantee for GAT

The Finance Committee of Parliament has given the go-ahead for some GH¢2 billion to be approved for the issuance of a sovereign guarantee for the Ghana Amalgamated Trust (GAT) Limited.

This is aimed at lending support to some indigenous Ghanaian banks.

The Ghana Amalgamated Trust was formed off the back of reforms within the banking sector to enable some five banks come together and be able to meet the minimum capital requirement.

In order to meet the minimum capital, Agricultural Development Bank (ADB), National Investment Bank (NIB), UMB Bank, Prudential Bank and the merged BSIC and Omni Bank were to receive assistance from government.

When the issue of government support came up, the Minority caucus refused to give backing to the formation of GAT and the intention of giving financial support to the distressed banks.

According to the Minority, the establishment of GAT is illegal since no parliamentary approval was given to its formation.

Following this disagreement, the matter was referred to the Finance Committee of Parliament, which upon several deliberations has now given the green light for Parliament to debate and approve an amount of GH¢2 billion in aid of the five banks.

During its sitting on Wednesday, March 13, the Committee recommended that Parliament adopt and approve the request to issue the said amount to help GAT.

“The Committee by a majority decision further recommends to the house to approve the waiver of the Guarantee fee totaling Ten Million Ghana Cedis (GHȻ10.00Million) being 0.5% of the guarantee amount as determined by the Minister of Finance in accordance with Article 174(2) of the 1992 Constitution of the Republic of Ghana and Section 66(5)(a) of the Public Financial Management Act , 2016 (Act 921),” the Committee noted.

It is, however, uncertain whether or not the Minority will still disagree despite the Committee’s approval.

Source: 3news.com|Ghana

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