Bank of Baroda (Ghana) Ltd: Why we are winding up in Ghana
The Bank of Baroda (Ghana) Ltd has denied media reports it is winding up its operations in Ghana because it does not want to meet the GH₵400 million minimum capital requirement imposed on banks in Ghana by the Bank of Ghana.
The bank in a statement issued Wednesday, January 2, 2019 by Praveen Kumar, Managing Director, said that assertion is far from the truth and that its decision to wind up for Stanbic Bank Ghana to assume its operations was pursuant to directives by the Government of India in respect of rationalisation of overseas operations of Public Sector Banks in India.
Below is the Bank’s statement.
Our attention has been drawn to a story that appeared on graphic.com.gh and myjoyonline.com on January 1, 2018 titled "Stanbic Bank 'takes over' Bank of Baroda" in which it was alleged that "The bank [of Baroda] resolved to wind up its Ghana operations around August 2018 to avoid raising the GHC400 million minimum capital, which it says its operation does not require..."
This assertion is false. The facts and sequence of events are as follows:
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- Pursuant to the Government of India's directives in respect of rationalisation of overseas operations of Public Sector Banks in India, Bank of Baroda India (BOBIN), decided to divest its banking activities from certain countries, including Ghana.
- The BOBIN policy resolution to divest its banking activities from Ghana was passed in December 2017.
- In light of the above, BOBIN, the shareholders of Bank of Baroda (Ghana) Ltd. (BOBGL), accorded approval for the closure of BOBGL.
- As authorized by BOBIN, the Board of BOBGL passed a resolution and notified the Bank of Ghana (BoG), of its intention to undertake a voluntary wind up of the Bank of Baroda (BOBGL) pursuant to section 139 (1) of the Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930).
- On 14th December, 2018, BOBGL filed an application for Certification of Voluntary winding up of BOBG with BoG.
- The BoG granted an approval to BOBGL to voluntarily wind up its operations on 24th December, 2018.
- With the approval of BoG, BOBGL entered into an Assumption Agreement with Stanbic Bank Ghana Limited (Stanbic) to assume all deposits and loan portfolio of BOBGL and ensure a seamless banking service to all customers in the Accra, Tema, and Kumasi branches, effective 2nd January, 2019.
Based on the above information and sequence of events, it is our expectation that graphic.com and myjoyonline will correct the story with immediate effect and accurately represent the information as presented above.
Praveen Kumar K. Managing Director
02nd January, 2019