A Press Release from the the Central Bank of The Gambia January 21st, informs that 12 out of the 13 commercial banks operating in The Gambia met the minimum capital requirement of D200 million. According to the release,
Societe General de Banque Liban (SGBL), the parent company of Prime Bank (Gambia) Limited, has opted to divest its subsidiary in The Gambia, hence the decision not to augment the capital of Prime Bank (Gambia) Limited to the required minimum capital of D200. million.
The CBG release further states that consequently, Prime Bank (Gambia) Limited sought and obtained the approval of the CBG to go into voluntary liquidation. It however said Prime Bank is sufficiently liquid to meet its obligations to depositors, other creditors and any other person entitled to funds or property thereof. It calls on customers wishing to collect their deposits to contact the Liquidator, Pannell Kerr Forster (PKF) at the bank's Head office at 42 Kairaba Avenue.
It could be recalled that the Central Bank of The Gambia ( CBG) issued a directive in 2008 increasing the minimum capital of banks in two stages from D60 million to D150 million and D200 million to be observed by end-December 2010 and 2012 respectively, the CBG release said.
According to the CBG Release issued late evening January 21st, a higher minimum capital requirement serves several purposes: (1) It would ensure that banks are better able to withstand periods of economic and financial stress; (ii) Maintains market confidence in the solvency of the banking system; (iii) Imposes market discipline; (iv) Provides a large cushion to absorb losses as well as protect tax payers from the risk of being called upon to bail out failing banks; and (v) ultimately, enhances the safety and soundness of the Gambian banking system which, in turn, promotes economic growth.