Ghana: GHC 2billion Support to Banks 'Not Bailout' - Government Clarifies
Government says some GHC 2 billion approved for some five local banks is only to support their recapitalization and must not be classified as a bailout arrangement.
In a press release issued on Saturday, the Finance Ministry said the Ghana Amalgamated Trust (GAT) arrangement "is to support solvent and strong indigenous banks to meet the new minimum capital requirement, and is not a bailout programme for banks that have been resolved by the Bank of Ghana."
Government says it worked with an Advisor and selected Pension Funds to structure the GAT, a Special Purpose Vehicle (SPV), to support solvent and well-run indigenous banks which were otherwise having difficulties meeting the new minimum capital requirement deadline, to meet their obligations.
"The President of the Republic, Nana Addo Dankwa Akufo-Addo, concerned about the difficulties such well-run, solvent Ghanaian-owned banks were likely to face in raising capital on their own, set up a committee to explore various options available for these banks in order to retain and strengthen local interest in the banking sector," the statement said.
The Ministry explained further in the press release that based on the Committee's recommendation, an Advisor was appointed to facilitate the setting up of GAT with the objective of raising funds from the private sector, mainly Pension Funds, to support eligible indigenous banks that successfully completed the due diligence process.
"Qualifying banks for GAT investment have been determined on the basis of their solvency, local ownership, minimum pre-investment capitalization of GHS120 million and an independent valuation by PwC," the statement said. Read more from All Africa.
Source: All Africa