The central bank has explained in details its reasons for revoking the licenses of 23 savings and loans companies which have become insolvent.  In a press release Friday, the Bank of Ghana said the revocation of the licences was necessary since their shareholders have been unable to recapitalise them from insolvency over a reasonable period of time.  Read BoG’s detailed explanations for the shutdown. IDEAL FINANCE LIMITED Ideal Finance Limited was incorporated in 2009 under the Companies Act, 1963 (Act 179 and licensed by the Bank of Ghana under the Non-Bank Financial Institutions Act, 2008 (Act 774 as a money lending company. The company was subsequently licenced to carry on the business of a finance house on 18th December, 2014 and established its head office at East Legon in Accra. Ideal Finance has been faced with severe insolvency and liquidity challenges over the past two years. The Institution faces a significant capital shortfall with a Capital Adequacy Ratio (CAR) of negative 33% in breach of the minimum required of 13% with a corresponding capital deficit of negative Ghc188,257,625.35 The institution is also facing a severe liquidity crisis with numerous complaints received by the Financial Stability Department of the Bank of Ghana from aggrieved customers who have been unable to access their deposits with the institution for the last several months. What is more, it has consistently failed to meet the minimum cash reserve requirement of 10% of its total deposits. The Institution’s shareholders have failed to restore the bank to the required regulatory capital and liquidity levels in spite of long-standing promises that new capital was expected from foreign investors. The Bank of Ghana has found key regulatory violations such as the following: • The institution’s adjusted Net worth of negative GH¢117.5 million as at end November 2018 indicates that the paid up capital is impaired in violation of Section 28(1) Act 930. • The institution’s adjusted capital adequacy ratio of negative 32.8% as at end November 2018 is in violation of Section 29(2) of Act 930. • Contrary to section 64 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the institution’s exposure to its related party has consistently been above the regulatory limit of 25% of net own funds (NOF). Exposures to related parties (FirstTrust Savings & Loans and Ideal Capital partners) were to the tune of Ghc63.19 million. • The institution’s high non-performing loans (NPL) ratio of 23.2% was mainly attributed to poor credit risk management, thereby putting the deposits of its customer at risk. • The company is yet to publish its 2018 audited accounts contrary to section 90 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). Furthermore, the company did not keep accounting records in a manner that gives an accurate and reliable account of the transactions of the company, and did not therefore show a true and fair view of its operations. • Ideal Finance has not submitted their returns since November 2018. All efforts to get them to submit have proven futile. An onsite examination carried out in September 2017 revealed the following: 1. The institution did not appropriately classify fifteen (15) impaired loan accounts in accordance with the requirements of the Bank of Ghana’s Guide for Reporting Institutions, which resulted in an additional loan loss provision of GH¢14,255,275.53. 2. The Institution was technically over-exposed to all its credit customers due to its negative net own funds position which is in violation of Section 62(1) of Act 930. 3. Credit facilities granted to the affiliates of the Company were not approved by the Board and the exposures were not reported to Bank of Ghana in breach of Section 70(2) and 70(4) of Act 930. Total related party loans totaled GH¢52.70 million. In a letter dated 25th June, 2019, the Bank of Ghana was notified about the intention to merge the operations of Ideal Finance Limited (IFL) and FirsTrust Savings and Loans Limited (FTSL). A review of the documents submitted in connection with the proposed merger and all available records obtained from the two institutions revealed that: 1. The shareholders’ funds of Ideal Finance Limited (IFL) and FirsTrust Savings and Loans Limited (FTSL) as at March 2019 per the merger documents was negative GH¢62.18 million and negative GH¢93.22 million respectively. 2. The reported shareholders’ funds of IFL per the last submitted prudential returns as at November 2018 was GH¢28.89 million. This was adjusted to negative GH¢117.50 million due to additional loan loss provisions and impaired investments, resulting in a decline in the reported capital adequacy ratio (CAR) of 0.52% to negative 52.18%, indicating a capital deficit of GH¢171.92 million. 3. The reported shareholders’ funds of FTSL per the prudential returns for May 2019 of negative GH¢99.46 million was adjusted to negative GH¢174.10 million due to impaired investments, resulting in a further reduction in the CAR of negative 48.67% to negative 132.96%, indicating a capital deficit of GH¢189.13 million. 4. The CAR of the merged entity was therefore assessed to be negative 78.32% with a capital deficit of GH¢361.05 million. The merger will therefore, neither address the current financial challenges facing the two institutions, nor improve their future prospects. In the light of the above, BoG could not accede to the request to merge the operations of FirsTrust Savings and Loans Limited and Ideal Finance Limited. 5. The cash reserve ratios of FTSL as at May 2019 was 0.07% compared to the regulatory minimum of 10%. 6. Both institutions are unable to meet customer withdrawal needs and the Bank of Ghana has received countless complaints from customers of both institutions about their inability to access their funds. 7. The use of landed property to shore up capital for the emerging entity is considered unacceptable in the light of the insolvent and illiquid state of the two institutions. WOMEN'S WORLD BANKING GHANA (WWBG) SAVINGS AND LOANS LIMITED WWBG was incorporated on May 31, 1982 as a Non-Governmental Organisation and became fully operational as a private limited liability company on September 17, 1996. The company was subsequently licensed by Bank of Ghana in October 1996 as a savings and loans company. The Bank of Ghana determined that the institution was insolvent in October 2017. The Bank of Ghana has since March 2018 engaged the Board and Senior Management on a number of occasions on the need to restore the institution’s paid up capital and capital adequacy ratio to the required minimum levels. The shareholders have not been able to comply with a capital restoration plan the institution submitted on March 27, 2018 that proposed additional capital injections to meet the required minimum capital adequacy ratio. The institution’s reported capital adequacy ratio and net worth were both negative as at end-May 2019. The specific issues that led to the revocation of the institution’s licence included the following: a. The institution’s Net worth of negative GH¢45.56 million as at end May 2019 indicates that its paid up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 46.62% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The institution persistently recorded accumulated losses due to poor loan underwriting standards resulting in high non-performing loans. d. The institution has consistently breached the minimum cash reserve ratio requirement since March 2019. e. The institution’s failure to implement Bank of Ghana’s on-site examination recommendations. f. The institution’s external auditors expressed an opinion on the institution’s 2018 audited financial statements that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. MIDLAND SAVINGS AND LOANS COMPANY LIMITED Midland Savings and Loan Company Limited was licensed by the Bank of Ghana to operate as a Savings and Loans Company on October 21, 1996. It commenced full operations on March 13, 1997. The institution was found to be facing liquidity challenges in January 2017. A subsequent assessment indicated that the institution was undercapitalized and also facing serious liquidity challenges. The Bank of Ghana has since August 2018, engaged the Board and Senior Management on the need to inject additional capital. The specific issues that led to the revocation of the institution’s licence included the following: a. The institution’s Net worth of negative GH¢148.92 million as at end May 2019 indicates that its paid up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 311.91% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The institution failed to conduct due diligence on counter parties resulting in the impairment of some investments. In addition to the impairment of the investments, the persistent operational losses have resulted in an adjusted negative capital adequacy ratio and negative net worth as at August 31, 2018. d. The institution is over exposed to related parties such as Liberty Asset Management, Liberty DMI Microfinance and Griffin Financial Services continue to be rolled over in spite of the liquidity challenges it faces. e. The company has consistently breached the minimum cash reserve ratio requirement. Cash reserve requirement as at end May 2019 was 0.23%. f. The company failed to keep accounting records in a manner that gives an accurate and reliable account of its transactions. As a result, the institution is unable to submit prudential returns regularly and could not provide the various schedules that reconciles with key balance sheet balances such as loans and investments. g. As a result of the liquidity challenges, the company is unable to provide adequate funds to run the various branches thus rendering the branches inactive. h. The inability of the company to honour customers’ withdrawal request have resulted in customers resorting the use of their lawyers in filing claims on the institution and complaints to the Bank of Ghana. DREAM FINANCE LIMITED Dream Finance Limited (DFL) was licensed by the Bank of Ghana on October 25, 2013 as a Finance Company. Based on a 2015 review of the institutions operations, Bank of Ghana found Dream Finance to be insolvent and also facing liquidity challenges mainly as a result of the institution’s non-performing exposures to its related companies. The Bank of Ghana subsequently engaged the directors of the institution and agreed on a timeline to resolve the solvency and liquidity challenges. The institution failed to comply with the agreed plan. The institution’s capital adequacy ratio and net worth are both negative as at end-May 2019. The specific issues that led to the revocation of the institution’s license include the following: a. The institution’s Net worth of negative GH¢333.46 million as at end May 2019 indicates that its paid up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 7,508.10% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The use of depositors’ funds to finance related-party projects. The institution is overexposed to six (6) of its related companies. The non-performing related party exposures have contributed significantly to the liquidity challenges of the institution. d. The institution has persistently breached the cash reserve ratio requirement since 2015 due to serious liquidity challenges. It is also unable to honour customer’s withdrawal requests. e. The institution changed its name from Dream Finance Limited to El Finance Limited and also relocated its Head Office without the prior approval of the Bank of Ghana. f. Weaknesses in corporate governance practices as the institution is without a functioning board and key management personnel with the relevant qualifications and experience to do the business of banking. g. The institution was involved in creative accounting practices, thereby misrepresenting and misreporting its true financial position to the Bank of Ghana. h. The institution failed to implement Bank of Ghana on-site examination recommendations. i. The institution is currently not engaged in normal business activities as a result of its capital and liquidity challenges. EXPRESS SAVINGS AND LOAN LIMITED Express Savings and Loans Company Limited (ESLL) was licensed by the Bank of Ghana on 14th August 2007. The institution has remained insolvent since 2016 due to the inability of the shareholders to inject additional capital into the company. The institution has failed to meet the capital plan submitted to the Bank of Ghana in February 2018 requiring the institution to inject additional capital by end-April 2018 and subsequently to the required minimum. The institution’s adjusted capital adequacy ratio and net worth are both severely negative. as at end-May 2019. The specific issues that resulted in the revocation of the institution’s license include the following: a. The institution is insolvent and has consistently failed to meet the minimum Capital Adequacy Ratio requirement since 2016 due to accumulated losses. b. The institution’s Net worth of negative GH¢119.83 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. c. The institution’s capital adequacy ratio of negative 610.52% as at end May 2019 is in violation of Section 29(2) of Act 930. d. The institution has persistently failed to meet the minimum cash reserve ratio requirement and customer withdrawal requests since 2014. Cash reserve requirement as at end May 2019 was 0.23% e. The institution is overexposed to its related parties with regards placements. f. The institution has failed to submit as well as publish its audited financial statements since 2016 in breach of Act 930, which requires financial institutions to publish and furnish Bank of Ghana with a copy of their audited financial statements not later than four (4) months after the end of the financial year. g. The institution has closed down fourteen (14) of its eighteen (18) branches as at May 2019 without prior approval from the Bank of Ghana in breach of Section 25(2) of Act 930. FIRST ALLIED SAVINGS AND LOANS LIMITED First Allied Savings and Loans Limited (FASL) was licensed by Bank of Ghana to operate as a savings and loans company on March 27, 1996. First Allied Savings & Loans Ltd. (FASL) was found to be insolvent with a negative Capital Adequacy Ratio and a negative net worth as of 31 March 2018. The Bank of Ghana directed the Board Chairman/Majority Shareholder and Management of the Institution to immediately inject additional capital to address the capital deficiency. In June 2018, the Bank of Ghana received reports of a run on the institution FASL due to its inability to meet customers’ deposit withdrawals, especially at its Kumasi and Adabraka Branches. The liquidity challenges later spread to all the twenty-seven (27) branches of the Institution across the country. The shareholders have failed to address these liquidity challenges. A review of the institution’s operations in July 2018 revealed that its reported financial statements did not reflect its true state of affairs. An adjustment to the financials resulted in an assessed negative Capital Adequacy Ratio and negative net worth mainly due to huge accumulated losses recorded over the years, additional provision for loan losses and reversal of unearned interest receivables from income. The specific issues that led to the revocation of its license included the following: a. The institution’s Net worth of negative GH¢661.84 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 263.21% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The income surplus and profit & loss accounts per the General Ledger as at 31st August 2018 showed losses but the institution reported positive Income Surplus and Profit and Loss figures in the prudential returns as at 30th June 2018 submitted to the Bank of Ghana. d. The reported deposit liabilities were grossly understated as at end-June 2018, in effect, reducing customer deposits to conceal losses over the years. e. Total non-performing loans constituted 88.89% of the institution’s total loan portfolio. f. The current accounts of eight (8) related companies linked to the major shareholder were overdrawn in excess of GH¢100.00 million and were non-performing. g. The Institution purportedly advanced credit facilities to various institutions, predominantly churches and schools without proper documentation. These facilities are non-performing h. The Institution stopped submitting prudential returns to Bank of Ghana in June 2018, citing technical challenges. i. The Institution cannot meet the deposit withdrawals of its customers with many customer complaints received by the Bank of Ghana. FIRST AFRICAN SAVINGS AND LOANS LIMITED First African Savings & Loans Company Limited was incorporated in November 1993 to undertake money transfer and remittance business. It was licensed by Bank of Ghana to operate as a savings and loans company in October 2009. The company was found to be experiencing liquidity and capital adequacy challenges since 2017. In addition, the Bank of Ghana determined in August 2017 and December 2018 confirmed that the company was insolvent. The Bank of Ghana has since October 2018 engaged the Board and Senior Management on the need to inject additional capital. The specific issues that led to the revocation of its licence included the following: a. The institution’s Net worth of negative GH¢22.29 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 90.15% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The company failed to conduct due diligence on its counterparties resulting in the impairment of some of its investments. d. The company’s affiliate, First African Remittances, UK failed to reimburse funds totalling GH¢5.40 million due to First African Savings and Loans. First African Savings and Loans pre-financed remittance receivables and the said amount has been outstanding for over two years. The long outstanding remittance receivable has been provisioned as a loss. e. The company’s Non-Performing Loans ratio has been deteriorating since 2017 to virtually 100% non-performing at end May 2019. f. The company has consistently violated the minimum cash reserve ratio requirement, which is the regulatory measure of the liquidity position of deposit. g. The institution is unable to meet the withdrawal demands of its depositors. The institution has related party exposure which it is unable to recover. FIRST GHANA SAVINGS AND LOANS LIMITED First Ghana Savings and Loans Company Limited (FGSL) was a specialised deposit-taking institution originally licensed to operate as a mortgage financing institution. It was established in 1956 under the Building Societies Ordinance of 1955 and operated as a Building Society under the name ‘First Ghana Building Society’ (FGBS). In 2006, the institution changed its corporate status from a Building Society to a limited liability company which was renamed First Ghana Building Company Limited. Following the issuance of a savings and loans license on March 8, 2015, by Bank of Ghana, the institution’s name changed to First Ghana Savings and Loans Company Limited. The specific issues that led to the revocation of its license included the following: i. The institution’s Net worth of negative GH¢14.08 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. ii. The institution’s capital adequacy ratio of negative 54.47% as at end May 2019 is in violation of Section 29(2) of Act 930. iii. The cash reserve ratio of was below the required minimum of 10% from January 2019 to end-April 2019. iv. The institution has failed to submit a credible capital restoration plan to restore it to solvency. v. The Bank of Ghana has repeatedly engaged the Board and Senior Management on the need to inject additional capital but this has not yielded any positive results. FIRSTRUST SAVINGS AND LOANS LIMITED FirsTrust Savings and Loans Company Limited (FTSL) was authorised as a savings and loans by the Bank of Ghana on September 19, 2014, and was issued a license as FTSL on January 28, 2015. The name was changed to FirstTrust in January 2015. Prior to this, the institution was known as EZI Savings and Loans (EZI) Limited which was licensed by the BOG as a savings and loans institution on October 11, 2007, until its acquisition by Ideal Financial Holdings in 2014. Bank of Ghana’s reviews conducted in 2015, 2016 and 2017 all showed that the institution was showing severe signs of distress. The institution reported a negative capital adequacy ratio and net worth as at end-May 2019. The Bank of Ghana engaged the Board and Senior Management on the need to inject additional capital. The specific issues that led to the revocation of its license included the following: a. The institution’s Net worth of negative GH¢175.90 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 132.96% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The institution has breached the statutory cash reserve ratio (CRR) requirement since January 2018. The institution is currently facing challenges in meeting customer withdrawals, with numerous customer complaints to the Bank of Ghana. Cash reserve requirement as at end May 2019 was 0.07% d. The use of depositors’ funds to finance related-party projects. The institution is overexposed to six (6) of its related companies to the tune of GH¢17.93 million. The non-performing related party exposures has contributed significantly to the liquidity challenges of the institution. e. Weaknesses in corporate governance practices as the institution is without a functioning board since August 2018. f. The institution has consistently failed to implement Bank of Ghana on-site examination recommendations including the payment of penalties imposed for breaching some sections of Act 930. g. The institution failed to keep accounting records in a manner that gives an accurate and reliable account of its transactions. This constitutes unsafe and unsound banking practice. Bank of Gnana declined a request dated 25th July 2019 to merge the operations of FirsTrust Savings and Loans Limited and Ideal Finance Limited because the two institutions under consideration are both insolvent and illiquid. The total projected cash injection of GH¢127.00 million, if approved, will lead to total shareholders’ funds of the proposed merged entity from negative GH¢291.60 million to negative GH¢164.60 million and CAR from negative 78.32% to negative 47.26% leaving a significant capital deficit of GH¢234.05 million. The merger was, therefore, not going to address the current financial challenges facing the two institutions or improve their future prospects. GLOBAL ACCESS SAVINGS AND LOANS COMPANY LIMITED Global Access Savings and Loans Company Limited was incorporated under the laws of Ghana in 1998 and commenced business in February 2000 as a Partner Agent of ADB in the Western Union Money Transfer Business. The company grew and added other money transfer services to its remittance product line. Following the changing need of customers, Management decided to convert the company into a Savings and Loans Company. The company was granted a savings and loans company license on 15th June 2009 by the Bank of Ghana and it commenced operations on December 6, 2010. The institution has been insolvent since 2016 with serious liquidity challenges. The reported capital adequacy ratio and net worth are both negative. The Bank of Ghana has had several engagements with the Board and Senior Management on the need to inject additional capital but have not yielded any fruitful results. The institution rather opted to apply for liquidity support from the Bank of Ghana which was declined due to its insolvency position. The specific issues that led to the revocation of its license included the following: a. The institution’s Net worth of negative GH¢58.19 million as at end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930. b. The institution’s capital adequacy ratio of negative 195.06% as at end May 2019 is in violation of Section 29(2) of Act 930. c. The institution has breached the statutory cash reserve ratio requirement since 2016. d. The institution assumed the liability of a loan contracted by the majority shareholder amounting GH¢2.91 million. The loan amount was injected into the institution as equity capital. The liability was however concealed as a suspense account in the books of Global Access Savings and Loans Limited. e. The institution continues to record accumulated losses due mainly to high rent expenses paid to the majority shareholder for the use of its premises. f. The institution failed to keep accounting records in a manner that gives an accurate and reliable account of its transactions constitutes unsafe and unsound banking practice g. The institution failed to implement Bank of Ghana’s on-site examinations findings conducted in October 2018. h. There have been several complaints from customers about the inability of the Institution to honour depositors’ withdrawals. i. The company neither published nor submitted its 2017 Audited Financial Statements to the Bank of Ghana contrary to Act 930. IDEAL FINANCE LIMITED Ideal Finance Limited was incorporated in 2009 under the Companies Act, 1963 (Act 179 and licensed by the Bank of Ghana under the Non-Bank Financial Institutions Act, 2008 (Act 774 as a money lending company. The company was subsequently licenced to carry on the business of a finance house on 18th December, 2014 and established its head office at East Legon in Accra. Ideal Finance has been faced with severe insolvency and liquidity challenges over the past two years. The Institution faces a significant capital shortfall with a Capital Adequacy Ratio (CAR) of negative 33% in breach of the minimum required of 13% with a corresponding capital deficit of negative Ghc188,257,625.35 The institution is also facing a severe liquidity crisis with numerous complaints received by the Financial Stability Department of the Bank of Ghana from aggrieved customers who have been unable to access their deposits with the institution for the last several months. What is more, it has consistently failed to meet the minimum cash reserve requirement of 10% of its total deposits. The Institution’s shareholders have failed to restore the bank to the required regulatory capital and liquidity levels in spite of long-standing promises that new capital was expected from foreign investors. The Bank of Ghana has found key regulatory violations such as the following: • The institution’s adjusted Net worth of negative GH¢117.5 million as at end November 2018 indicates that the paid up capital is impaired in violation of Section 28(1) Act 930. • The institution’s adjusted capital adequacy ratio of negative 32.8% as at end November 2018 is in violation of Section 29(2) of Act 930. • Contrary to section 64 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the institution’s exposure to its related party has consistently been above the regulatory limit of 25% of net own funds (NOF). Exposures to related parties (FirstTrust Savings & Loans and Ideal Capital partners) were to the tune of Ghc63.19 million. • The institution’s high non-performing loans (NPL) ratio of 23.2% was mainly attributed to poor credit risk management, thereby putting the deposits of its customer at risk. • The company is yet to publish its 2018 audited accounts contrary to section 90 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). Furthermore, the company did not keep accounting records in a manner that gives an accurate and reliable account of the transactions of the company, and did not therefore show a true and fair view of its operations. • Ideal Finance has not submitted their returns since November 2018. All efforts to get them to submit have proven futile. An onsite examination carried out in September 2017 revealed the following: 1. The institution did not appropriately classify fifteen (15) impaired loan accounts in accordance with the requirements of the Bank of Ghana’s Guide for Reporting Institutions, which resulted in an additional loan loss provision of GH¢14,255,275.53. 2. The Institution was technically over-exposed to all its credit customers due to its negative net own funds position which is in violation of Section 62(1) of Act 930. 3. Credit facilities granted to the affiliates of the Company were not approved by the Board and the exposures were not reported to Bank of Ghana in breach of Section 70(2) and 70(4) of Act 930. Total related party loans totaled GH¢52.70 million. In a letter dated 25th June, 2019, the Bank of Ghana was notified about the intention to merge the operations of Ideal Finance Limited (IFL) and FirsTrust Savings and Loans Limited (FTSL). A review of the documents submitted in connection with the proposed merger and all available records obtained from the two institutions revealed that: 1. The shareholders’ funds of Ideal Finance Limited (IFL) and FirsTrust Savings and Loans Limited (FTSL) as at March 2019 per the merger documents was negative GH¢62.18 million and negative GH¢93.22 million respectively. 2. The reported shareholders’ funds of IFL per the last submitted prudential returns as at November 2018 was GH¢28.89 million. This was adjusted to negative GH¢117.50 million due to additional loan loss provisions and impaired investments, resulting in a decline in the reported capital adequacy ratio (CAR) of 0.52% to negative 52.18%, indicating a capital deficit of GH¢171.92 million. 3. The reported shareholders’ funds of FTSL per the prudential returns for May 2019 of negative GH¢99.46 million was adjusted to negative GH¢174.10 million due to impaired investments, resulting in a further reduction in the CAR of negative 48.67% to negative 132.96%, indicating a capital deficit of GH¢189.13 million. 4. The CAR of the merged entity was therefore assessed to be negative 78.32% with a capital deficit of GH¢361.05 million. The merger will therefore, neither address the current financial challenges facing the two institutions, nor improve their future prospects. In the light of the above, BoG could not accede to the request to merge the operations of FirsTrust Savings and Loans Limited and Ideal Finance Limited. 5. The cash reserve ratios of FTSL as at May 2019 was 0.07% compared to the regulatory minimum of 10%. 6. Both institutions are unable to meet customer withdrawal needs and the Bank of Ghana has received countless complaints from customers of both institutions about their inability to access their funds. 7. The use of landed property to shore up capital for the emerging entity is considered unacceptable in the light of the insolvent and illiquid state of the two institutions.