In 2017, the Bank of Ghana embarked on a comprehensive reform agenda aimed at strengthening the regulatory and supervisory framework for a resilient banking sector.
In the process, some of the banks had their licenses revoked while others were merged due to their inability to raise the new 400 million cedi minimum capital requirement as of 31 December 2018.
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Others were refrained from operating because they aquired licenses fraudulently and via the use of non-existent capital.
Amidst the revocation of licenses and collapse of these banks, the government established the consolidated bank of Ghana in which assets and liabilities of seven collapsed banks were transferred.
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The consolidated bank was established for five distressed banks. In entirety, seven banks were consolidated. They include the Sovereign Bank, The Royal Bank, Beige Bank, Premium Bank and Heritage Bank, Unibank.
At the end of the financial sector reforms which lasted for two years, only sixteen banks were able to recapitalize successfully.
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The other three merged with five banks receiving bailouts from the government. One bank exited the sector voluntarily.
This development brought the total number of universal banks from 33 to 23. These 23 banks were now given the mandate and license to operate.
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Below is a breakdown of the whole process.
Two banks, Capital Bank and UT Bank were first take over by the Ghana Commercial Bank in a purchase and assumption agreement.
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Seven banks had their licenses revoked and placed under the consolidated bank of Ghana. They were Unibank, Heritage Bank, Beige Bank, Premium Bank, Royal Bank, Sovereign Bank and Construction Bank.
The Bank of Baroda as part of its reforms willing folded up operations in the country and exited.
Six banks went into a merger agreement. They were First Atlantic Bank, Merchant Bank, Energy Commercial Bank, Omnibank Ghana Limited, Bank Sahel Sahara Limited, First National Bank and GHL Bank Limited.
This now leaves the total number of universal banks at 23. Governor of the Bank of Ghana notes the 23 banks as more robust, better specialized, more liquid and make for a better economy