Ghana has formed a new indigenous bank called the Consolidated Bank. It has merged five local banks struggling to remain in business.
The Bank of Ghana on Wednesday made the announcement as it acts against banks struggling to meet its minimum capital requirement policy.
Ghana’s Central Bank has set minimum capital requirement for banks at $83 million (GH¢400 million).
The banks that have been affected are Royal Bank, Beige Bank, Sovereign Bank, The construction Bank and Unibank.
What does the merger mean?
A statement from the Bank of Ghana said it has “revoked the licences of uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited”
“All deposits of the five banks are safe and have been transferred to the Consolidated Bank.
Customers can carry out their business as usual at their respective banks which will now become branches of the Consolidated Bank.
All staff of these banks will become staff of the Consolidated Bank. Boards of Directors and shareholders of these banks no longer have any roles” the statement explained.
Revamping the banking sector
The new merged bank is to receive financial support from the government to remain viable.
Many local banks are reported to be struggling remain viable endangering the deposits of customers.
The central bank said in its statement that “Ghana needs a strong and stable banking sector to drive the process of economic transformation.
A weak banking sector means that access to credit will be limited while lending rates will continue to be high.”