Breaking: Bank of Ghana (BoG) collapses 5 banks into Consolidated Bank Ghana Ltd

The Bank of Ghana has collapsed five banks into a Consolidated Bank of Ghana Limited.

The banks are BEIGE, Sovereign, Construction, UniBank and Royal Bank.

It follows the insolvency of the four banks after investigations by Bank of Ghana.

The BoG Governor, Dr Ernest Addison announced this Wednesday afternoon.

The banks have been put under new name Consolidate Banks. Government has committed 450 million cedis to support this banks.

Announcing the move, the governor of the Central Bank Ernest Addison noted: “Beige, Sovereign and Construction Banks obtained their licenses under false pretenses using fictitious and nonexistent capital”.

The development comes as the Construction Bank voluntarily folded up its Ghana operations on Tuesday July 31,2018.

The Central Bank increased the minimum capital requirement for banks from GH¢120 to GH¢400 million to improve stability in the banking industry whilst growing the industry.

Analysts and market watchers believe few but larger banks will help accelerate the country’s economic growth quickly since they can underwrite big ticket transactions as well as remain liquid and stronger. The few but stronger banks they believe will also help to reduce cost of credit, access to credit, non-performing loans, amongst others.

There are about 24 and 19 universal banks in Nigeria and South Africa, compare to the 34 banks in Ghana though South Africa and Nigerian economies are far bigger than Ghana. However, there are foreign banks with representative offices in these two and populous countries.