BoG Governor explains UT, Capital Bank license revocations

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has attributed the revocation of licenses for UT Bank and Capital Bank to stringent reforms recommended by the International Monetary Fund (IMF) to stabilise Ghana's financial sector.

Speaking at the Governor’s Day dinner organised by the Chartered Institute of Bankers, Dr. Addison revealed that the IMF had identified critical weaknesses in the banking system and set specific "prior actions" as prerequisites for financial assistance. Among these conditions was the dissolution of the two banks.

“The IMF requires certain actions to be completed before even convening a board meeting to discuss a country’s situation or release funds,” Dr. Addison said. “One of these prior actions was the revocation of licenses for UT Bank and Capital Bank. This was unprecedented for many Ghanaians and came as a shock.”

The two banks had their licenses revoked in August 2017, the same year Dr. Addison took over as Governor.

He explained that the decision, though difficult, was necessary to prevent further destabilization of the financial sector.

Dr. Addison further noted that the financial sector cleanup, which included the closure of several distressed institutions, has strengthened Ghana's banking system.

He credited these reforms with enabling the sector to withstand external shocks, such as the COVID-19 pandemic and the Russia-Ukraine conflict.