Business News Fri, 7 Sep 2018

98 branches of Consolidated Bank to go

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Officials of newly-created Consolidated Bank Ghana Limited yesterday told the Finance Committee of Parliament that the bank intends to close down 98 branches out of the 191 branches inherited from the five collapsed banks.

The Consolidated Bank was created after the Bank of Ghana (BoG) last month revoked the licences of five banks, including Unibank, owing to insolvency.

The new bank is also expected to embark on staff rationalization to cut down the number of workers needed to effectively run the bank.

Ahead of that, the mangers of the new bank, which is a creation of the state, would carry out performance assessment of all workers across the country before determining how many of them would be laid off by the end of this month.

Chairman of the Finance Committee, Dr Assibey-Yeboah made these known during a press briefing at end of day-two of the sitting yesterday.

He said the government intervened to save jobs, otherwise all workers of the insolvent banks would have been sacked.

The BoG, on August 1, 2018, revoked the licences of five banks and merged them into a new entity known as Consolidated Bank Ghana Limited.

The BoG claimed some of affected banks procured their operational licences through dubious means.

The five banks are The Royal Bank, Beige Bank, Sovereign Bank Limited, Construction Bank and uniBank Ghana Limited.

Severance Packages

Meanwhile, the Finance Committee would engage the BoG soon to expedite action on the payment of severance packages to about 3,000 workers of the seven indigenous banks who have lost their jobs as a result of the collapse of those banks.

The chairman of the committee made this known to journalists after it met officials of KPMG and PriceWaterhouseCoopers (PWC), who are the receivers of the collapsed banks during its ongoing probe into the collapse of the banks.

According to Dr. Assibey-Yeboah, who is also the New Patriotic Party (NPP) Member of Parliament (MP) for New Juaben South, the committee is expected to engage the Central Bank to expedite the processes of paying severance packages to the affected workers.

“If you go into the law, it will take more time before these severance packages will be paid, but we have an opportunity to engage Bank of Ghana and some of these will be fast-tracked,” he said, adding that some workers, who were laid off a year ago, have not received severance packages.

“I think it is about time those severance packages were given to them,” Dr. Assibey-Yeboah told journalists.

PriceWaterhouseCoopers are the receivers for UT and Capital Bank, while KPMG are receivers for the five banks, comprising Biege, Unibank, Construction Bank, Royal Bank and Sovereign Bank.

Dr Assibey-Yeboah said per the Banks and Specialised Deposit Taking Institutions Law (Act 930), the receivers are accountable to BoG.

“They don’t report to us, but because matters like employees’ severance concern us; we wanted to know when former workers of UT and Capital Bank will get their severance packages and as a matter of fact, they gave us the details and how they have arrived at the packages they are going to pay to them,” he said.

The Minority Leader, Haruna Iddrisu, who was at the committee meeting, also expressed concern about the job losses and asked whether the banks have capacity to pay severance packages to the affected workers.

“What happens to the children and wards of these affected persons as school reopens, what is it that the government of Ghana can do to find new life to those collapsed institutions as soon as possible,” he said, adding that when the US faced similar financial crisis sometime ago, the state intervened to support those financial institutions.

He, therefore, urged the government to emulate the example of the US and come to the aid of those institutions.

The committee would continue with its in-camera sitting today with officials of the Security and Exchange Commission and National Insurance Commission (NIC).

Source: dailyguideafrica.com
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