{"id":437598,"date":"2017-11-15T17:54:13","date_gmt":"2017-11-15T17:54:13","guid":{"rendered":"https:\/\/ghana-mma.com\/2017\/11\/15\/ut-capital-bank-collapse-confidence-in-banking-sector-still-strong-ofori-atta\/"},"modified":"2017-11-15T17:54:13","modified_gmt":"2017-11-15T17:54:13","slug":"ut-capital-bank-collapse-confidence-in-banking-sector-still-strong-ofori-atta","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2017\/11\/15\/ut-capital-bank-collapse-confidence-in-banking-sector-still-strong-ofori-atta\/","title":{"rendered":"UT, Capital Bank collapse: Confidence in banking sector still strong \u2013 Ofori Atta"},"content":{"rendered":"<p><\/p>\n<div id=\"medsection1\">\n<!-- End of html generated by this->header() --><\/p>\n<p class=\"floatLeft\">Business News of Wednesday, 15 November 2017<\/p>\n<p class=\"floatRight\"><strong>Source: <\/strong>Myjoyonline.com <\/p>\n<p>2017-11-15<\/p>\n<div class=\"article-left\">\n<p class=\"article-image\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/ghanamma.com\/wp-content\/uploads\/2017\/08\/84195159.295.jpg\" alt=\"Ut Capital Bank\" title=\"Ut Capital Bank\" width=\"295\" height=\"162\" \/><span class=\"image_caption\"><span>In August, the Bank of Ghana (BoG) revoked the licenses of the UT and Capital banks<\/span><\/span><\/p>\n<div class=\"noPrint\">\n<div id=\"537626303\" style=\"width:300;height:250;margin:0;padding:0\">\n<p>\t\t  <noscript><iframe loading=\"lazy\" id=\"b2ad7fa7fd\" name=\"b2ad7fa7fd\" src=\"http:\/\/ghanaweb-d.openx.net\/w\/1.0\/afr?auid=537626303&amp;cb=151057541642732\" frameborder=\"0\" scrolling=\"no\" width=\"300\" height=\"250\"><a href=\"\/\/ghanaweb-d.openx.net\/w\/1.0\/rc?cs=b2ad7fa7fd&amp;cb=151057541642732\"><\/p>\n<p>\t\t  <img decoding=\"async\" src=\"https:\/\/ghanamma.com\/wp-content\/uploads\/2017\/11\/1510768453_324_ai\" border=\"0\" alt=\"\" \/><\/a><\/iframe><\/noscript><\/p><\/div>\n<\/p><\/div>\n<\/div>\n<p style=\"clear:right\">The Finance Minister, Ken Ofori Atta has stated that confidence in the banking sector has not waned despite the recent take over of the UT and Capital banks by the Ghana Commercial Bank (GCB).<\/p>\n<p>In August, the Bank of Ghana (BoG) revoked the licenses of the UT and Capital banks, describing them as \u201cdeeply insolvent.\u201d<\/p>\n<p>Liabilities of the two banks, according to the central bank overwhelmed their assets, leaving the BoG with no option than to undertake a Purchase and Assumption transaction as the least costly method of dealing with a collapse.<\/p>\n<p>The banks were \u201cunable to develop an acceptable plan\u201d, according to the BoG although it made efforts to help both banks recover through private alternatives.<\/p>\n<p>The Central Bank said there were \u201crepeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls.\u201d<\/p>\n<p>However, the owners and managers of UT Bank and Capital Bank were unable to increase their capital to address the insolvency.<\/p>\n<p><b><\/b>Finance MInister, Ken Ofori Atta delivering the 2018 budget statement in Parliament <\/p>\n<p><iframe loading=\"lazy\" width=\"600\" height=\"350\" src=\"https:\/\/www.youtube.com\/embed\/FR5vQPGZNJ8\" frameborder=\"0\" gesture=\"media\" allowfullscreen=\"\"><\/iframe><\/p>\n<p>Mr Ofori Atta said the BoG had to step in and address the challenge that both banks posed to the entire financial system by facilitating the take over by the GCB Bank.<\/p>\n<p>\u201cThis intervention was made with the clear policy intent to protect deposits of the public and prevent any contagion effect on the entire industry.<\/p>\n<p>\u201cThe government is proud to announce that despite the failure of these two banks in 2017, the confidence and trust in the financial sector remain strong,\u201d he added.<\/p>\n<p>He said all banks are expected to meet the new minimum capital requirement as stipulated by the BoG for universal banks \u2013 from GHS120 million to GHS400 million \u2013 by December 2018.<\/p>\n<p><iframe loading=\"lazy\" width=\"600\" height=\"350\" src=\"https:\/\/www.youtube.com\/embed\/ab8rcpBXJxk\" frameborder=\"0\" gesture=\"media\" allowfullscreen=\"\"><\/iframe><\/p>\n<p>The increase in the capital requirement, he stated, was to ensure that banks have more capacity to lend to businesses, especially within the purview of their single obligor limits.<\/p>\n<p>\u201cGovernment streamlined ESLA flows to accommodate all the existing legacy debts \u2013 about GHS10 billion \u2013 owed by the energy sector firms to banks and suppliers, and took steps to issue an ESLA-backed bond to pay off these debts.<\/p>\n<p>\u201cThis initiative is very important in resolving the liquidity challenges faced by the banks and will enable stronger credit to the private sector especially as banks\u2019 non-performing loans improve.<\/p>\n<p>Mr Ofori Atta said the government has also prepared the payment systems and electronic transfer bill to support the transition from cash dominant to cash light economy.<\/p>\n<p>\u201cIn 2018, this Bill will be laid before Parliament,\u201d he added.<\/p>\n<div class=\"related_articles\" style=\"width: 100%;\">\n<div style=\"clear: both; font-size: 90%; background-color: #eeeaea; padding: 5px; width: 60%; margin-top: 10px;\">\n<table width=\"100%\" border=\"0\" cellpadding=\"0\" cellspacing=\"0\">\n<tr>\n<td style=\"border:0; padding:0\"><img decoding=\"async\" src=\"https:\/\/ghanamma.com\/wp-content\/uploads\/2017\/07\/96566925.jpg\" style=\"padding-right:2px;\" \/><\/td>\n<td style=\"border:0; padding:0;width:100%; vertical-align:middle; font-size:11px;\">For more news, go to <b>myjoyonline.com<\/b><\/td>\n<\/tr>\n<\/table>\n<p><strong>Related Articles:<\/strong><\/p>\n<p><strong>Comments:<\/strong><br \/>This article has no comments yet, be the first to comment\n<\/p>\n<\/div>\n<\/div>\n<p><!-- uploaded by: -1 updated by: -1 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Capital banks The Finance Minister, Ken Ofori Atta has stated that confidence in the banking sector has not waned despite the recent take over of the UT and Capital banks by [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":411423,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-437598","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-local-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UT, Capital Bank collapse: Confidence in banking sector still strong \u2013 Ofori Atta - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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