The Bank of Ghana (BoG) has justified the need to issue a bond to cater for the gap that has been realized after the assets of collapsed UT bank and Capital bank were compared to its liabilities.
According to the central bank, it is important for government to issue the bond to save the deposits of customers of the defunct banks.
Government has announced plans to issue a two billion cedis bond to cater for the collapse of UT bank and Capital Bank.
Speaking on the Citi Breakfast Show, the Head of Banking Supervision at the BoG, Mr. Osei Gyasi maintained that, such losses are the reason why the central bank must always step in quickly to sanction banks to prevent the tax payer from bearing the cost of the collapse.
“The receiver took over or assumed as far as the good assets and the liabilities that were taken over by GCB are concerned, it is the gap between the asset and the liabilities that would have to be funded by government. That is why I say it the cost to the ordinary tax payer,” he said.
Mr. Gyasi explained that, the receiver—PwC, will net the assets of the bank against it liabilities to determine the extent of the liabilities.
“The receiver process, is such that the receiver will have to realize the assets of these banks which were not taken over by GCB under the purchase and the assumption transaction,” he said.
“There are some assets that were not taken over by GCB and the receiver will have to realize this assets and the proceeds will be used to settle the liabilities that the receiver took over or assumed,” he explained.