Civil Society Group, Alliance for Social Equity and Public Accountability (ASEPA) has questioned the propriety of the Bank of Ghana’s decision to save the Universal Merchant Bank (UMB) in its banking clean-up undertaken two years ago.

Executive Director of ASEPA, Mensah Thompson in an interview with Kasapa 102.5 FM said the decision by the Central Bank to close down Heritage bank on grounds of the Bank’s over-exposure to its majority shareholders among others was flawed.

“In 2016 BoG called the Heritage Bank to dilute it’s 70%, majority shareholder. And were subsequently collapsed, even when they were in the process of diluting the majority shares down from 70%.”

“There’s principle of law. The principle of law is that, the rules of the game must be applied equally to everybody. You’re saying that one shareholder owns 70% shares in a bank, so you don’t understand and you’ve closed the bank own. And another bank, one shareholder owns 96% and the bank is still there. What impression are you trying to create?” Mensah Thompson questioned on Anopa Kasapa on Kasapa 102.5 FM.

Thompson has described the banking sector clean up as a cruel exercise, that was implemented by government with a tainted motive.

According to the organisation, the exercise was also criminal because it was carried out in contravention to Act 930, other banking regulations and international banking standards.

In 2018 a financial sector cleanup undertaken by the Bank of Ghana resulted in the revocation of the licenses of many financial institutions including banks and microfinance companies.

Banks that were collapsed and officially ceased to be in existence after the financial Sector included Capital Bank and UT Bank who were taken over by GCB Bank in a purchase and assumption agreement.

However, seven banks namely: The Royal Bank, Heritage Bank, Construction Bank, uniBank Sovereign Bank, The Beige Bank, and Premium Bank had their licenses revoked and placed under the Consolidated Bank of Ghana.

Six Banks merged (3 mergers): First Atlantic Merchant Bank Limited and Energy Commercial Bank, OmniBank Ghana Limited and Bank Sahel Sahara Ghana and First National Bank and GHL Bank Limited reached merger agreements.