Bank of Baroda says the Stanbic deal an assumption not take over

BoB
  • Stanbic Bank Ghana has not taken over Bank of Baroda.
  • Meanwhile, all deposits and loan portfolio of Bank of Baroda have been handed over to Stanbic bank effective January 1, 2019.
  • The moves comes after an assumption agreement between the banks was reached.

The Bank of Baroda, Ghana has denied news reports that the Bank has been taken over by Stanbic Bank Ghana.

In a statement signed by the Managing Director, it said the two banks had an assumption deal and not a takeover as reported.

The statement indicated that all deposits and loan portfolio of Bank of Baroda have been handed over to Stanbic bank effective January 1, 2019.

The move follows an assumption between the two banks.

The Bank of Baroda stated that it voluntarily winded up its Ghana operations due to a regulatory decision by the Indian government.

What is an Assumption agreement

It is a legal contract between two parties, whereby one party agrees to assume the responsibilities, interests, rights, and obligations of another party in respect to a separate agreement made between the latter and a third party.

Below is the full statement

Our attention has been drawn to a story that appeared on graphic.com and Myjoyonline 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 GH¢400 million minimum capital, which it says its operation does not require…”

This assertion is false.

The facts and sequence of events are as follows:

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 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.com will correct the story with immediate effect and accurately represent the information as presented above.

All enquiries about this release and matters relating to the Bank of Baroda (Ghana) Ltd. should be directed to md.qhanabankofbaroda.com.

Praveen Kumar K. 

Managing Director

2nd January 2019

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