Depositors told to withdraw savings from Oceanic Bank

Clients of Oceanic Bank (Gambia) Limited have been told to withdraw their deposits from the bank, as it has failed to augment its capital to the new requirement established by the Central Bank of The Gambia (CBG).

As a result of its failure to meet the new CBG capital requirement of D150 million by 31 December 2010, Oceanic Bank (Gambia) Limited will not be operational within the jurisdiction of the Republic of The Gambia.

However, it “is sufficiently liquid to meet its obligations with depositors, other creditors and persons entitled to any fund or property” of the bank, according to the CBG.

“Customers wishing to collect their deposits should contact the Managing Director/Chief Executive Officer of Oceanic Bank (Gambia) Limited at the bank’s Head Office on 10 Kairaba Avenue,” a  3rd January 2011 press release from the CBG stated.

The Central Bank issued a directive in 2008 increasing the minimum capital of banks in two stages from D60 million to D150 million by end-December 2010 and to D200 million by end-December 2012.

This is because a higher minimum capital requirement serves several purposes, according to the CBG.

Its release stated: “(i) It would ensure that banks are better able to withstand periods of economic and financial stress and therefore support economic growth; (ii) Maintains market confidence in the solvency of the banking system; (iii) Imposes market discipline and (iv) Provides a large cushion to protect tax payers from the risk of being called to bail out failing banks.”

The capital increase, according to the CBG, would further enhance the safety and soundness of the Gambian banking system which, in turn, promotes economic growth.

Reason for the bank’s budge

Oceanic Bank has had to call it quit from the Gambia banking industry because its parent bank in Nigeria has decided to maintain a commercial banking licence that permits it to operate only within the jurisdiction of Nigeria, and not beyond. So its subsidiary in The Gambia would have to stop operation.

The CBG release elaborates: “In compliance with the ‘Regulation on the Scope of Banking Activities and Ancillary matters, Number 3, 2010’ prescribed by the Central Bank of Nigeria (CBN), Oceanic Bank International Plc, the parent bank of Oceanic Bank (Gambia) Limited, has  opted to apply for National Commercial Banking Licence. The implication is that Oceanic International Plc will divest from all local and international subsidiaries, hence its decision not to augment the capital of Oceanic Bank (Gambia) Limited to the minimum requirement of D150 million.”

The CBG also says 13 of the 14 banks operating in The Gambia met the minimum requirement as at the deadline of 31st December 2010.