Ghana’s central bank has revoked the operating licenses of two distressed local banks and transferred their deposits and selected assets to state-owned GCB Bank in order to protect financial stability, it said on Monday.

The liquidation of UT Bank and Capital Bank became necessary in order to protect depositors funds owing to the “severe impairment” of their capital, the central bank said.

The liquidation formed part of prior-actions agreed with the International Monetary Fund ahead of the next review of Ghana’s three-year aid programme, at the end of August.

GCB bank is the second largest bank by assets out of 33 banks operating in Ghana, including UT and Capital.

“UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets, putting them in a position not to be able to meet their obligations,” a spokesman at the bank said in a response to emailed questions.

Deposits at the two banks are safe and depositors will now become customers of GCB Bank and they may continue banking at the UT Bank and Capital Bank branch locations, the spokesman added.