Business News of Saturday, 12 May 2018
Source: www.ghanaweb.live
2018-05-12Capital requirement is critical, pay or stop operating – Dusk Capital CEO
play videoCEO of Dusk Capital, Bernard Osei-Tutu
Chief Executive Officer (CEO) of Dusk Capital, Bernard Osei-Tutu has advised financial institutions to either pay the minimum capital requirements the Bank of Ghana (BoG) is demanding or stop operating.
According to Mr Osei-Tutu, the BoG and other agencies are mandated by law to do their work without interference and it is the duty of the various financial institutions
Read full articleto corporate with them.
He said “What they are doing is to make sure that we have the right resources because banking is not a cheap market. You need to have that financial muscles to be able to do what you are doing well.”
He noted that the capital requirement is very critical. “For any banking institution, you need to be very solvent and you need to be very liquid. If you don’t have that financial market it is simple matter you don’t deserve to be in that industry, it is as simple as that.”
In August, the Bank of Ghana (BoG) revoked the licenses of the UT and Capital banks, describing them as “deeply insolvent.”
Liabilities of the two banks, according to the central bank overwhelmed their assets, leaving the BoG with no option than to undertake a Purchase and Assumption transaction as the least costly method of dealing with the collapse.
The banks were “unable to develop an acceptable plan”, according to the BoG although it made efforts to help both banks recover through private alternatives.
The Central Bank said there were “repeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls.”
However, the owners and managers of UT Bank and Capital Bank were unable to increase their capital to address the insolvency.
But Mr Osei-Tutu says it is a very good call for the regulator to demand such an amount from operators but “it is just to say that if you are not ready and don’t have the financial muscle to operate in this industry, then you don’t need to be here.”
Mr Osei-Tutu stated he support that call from the BoG and Dusk Capital is ready to commit all its resources to meet all insolvency issue that comes their way.
