Capital, UT banks’ collapse: BoG unblocks accounts of key managers

The Bank of Ghana has begun unblocking accounts of key managers of UT Bank and Capital Bank following investigations into the activities of the two banks leading to their collapse.

This is contrary to media reports that the central bank has frozen the accounts of top managers and Directors of the two banks as it looks into their operations.

The Bank of Ghana on Monday granted permission to GCB Bank to purchase UT Bank and Capital bank as they were unable to increase their cash requirement need for their banking operations.

The Head of Banking Supervision at the Bank of Ghana, Raymond Amanfu told Citi News that the exercise carried out so far does not point to any untoward action of the affected accounts.

“We have not frozen anybody's account. Under the law the accounts can be frozen either by EOCO, SIC or by the order of a court. What we have done is that senior management of the two banks and directors of the two banks are reviewing their accounts. We are reviewing their banking accounts and for us to enable us have uninterrupted access we say block the accounts let's see the transaction over a definite period of maybe about a week prior to the action or two weeks prior to the action and as I speak almost everybody's account has been unblocked. “

Mr. Amanfu explained that nothing untoward was discovered in the course of investigations,  hence the decision to unblock the accounts.

Possible negligence
Research had indicated that UT Bank was in a precarious position as it was found to be the riskiest bank in Ghana listed on the stock exchange.

The situation with Capital Bank has been found to be more nefarious given the existence of a leaked 2014 memo indicating that the bank, then First Capital Plus Bank, was on the verge of collapse

The bank's Chief Executive Officer at the time even described the situation as a “time bomb.”

The August 2014 memorandum, signed by the CEO of the Bank at the time, John Kofi Mensah, warned that Capital Bank had capitalization issues and may not be able to meet its obligations to its clients.

The memo addressed to the Board of the Bank, also outlined cases of mismanagement that had compromised their shareholder's credibility.

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By: Marian Ansah & Pius Amihere Eduku/citifmonline.com/Ghana