BoG okays payment of severance package to former workers of Capital Bank

The Bank of Ghana (BoG) has finally given clearance for the payment of severance package for former workers of the defunct Capital Bank, almost two years after its collapse.

“BoG has instructed that part of their interim dividends distributable by the Joint Receivers to them (BoG) as 1st priority creditor, be used to fully fund the severance packages of the ex- staff of Capital Bank,” a document by the receivers to the workers stated.

The document, sighted by Thursday was jointly signed by the receivers, Vish Ashiagbor and Eric Nana Nipah of PricewaterhouseCoopers.

The workers whose appointments were terminated following the takeover of the defunct bank by the GCB Bank, have for months been agitating for their end of service benefits which they said were promised them by the receivers.

According to the Joint Receivers of Capital Bank, order of payments as per the law, ought to have been to Bank of Ghana, Statutory Agencies, compensation to employees and other unsecured creditors.

Though the receivers said they were going to “declare and make interim divide distributions to the Bank of Ghana” as the first priority, the BoG directed the money to be used to service the severance package of the ex-workers for their “loss of employment and attendant hardships”.

Details of when the severance package will be paid and how is expected to be announced this week to the workers through their union, the Union of Commerce, Industry and Finance (UNICOF).

“The Joint Receivers will notify ex-staff of the bank through their representatives of the timing and mode of these payments in the course of the week,” the document stated.

It noted that the payment of the severance package will be done per the terms negotiated for with UNICOF on the workers behalf.

The Bank of Ghana in August 2017 revoked the licence of Capital Bank and UT Bank on grounds of being “deeply insolvent”.

BoG explained their liabilities exceeded their assets, which it said put them “in a position not to be able to meet their obligations as and when they fell due”.

According to BoG, despite repeated agreements between them and the two banks to implement an action plan to address these significant shortfalls, the owners and managers “were unable to increase the capital of the banks to address the insolvency”.

In a move to protect customers of the banks, BOG resolved to revoke the licences of UT Bank and Capital Bank under a Purchase and Assumption transaction with GCB Bank.


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