The business day yesterday closed with the disturbing news about one of the financial institutions in the country being declared insolvent. Indeed news about what has befallen Unibank and the decision of the apex bank to take over its management speaks volumes about the health of the banking industry in the country.
We can recall vividly the issue raised about the health of eight banks in the country. That was in the twilight of the last regime but the originator of the assertion Dr. Mahamudu Bawumia was diplomatic keeping the details of the said banks under wraps. The bottom-line of his assertion was that the banking sector was distressed – a situation occasioned by an ailing economy. Now that the chickens have come home to roost, we are seeing clearly what informed Dr Bawumia's disclosure at the time that he uttered it.
The economy is yet to recover from the ailment it suffered under the economic management of the NDC era. It has just begun to respond to treatment being administered by President Akufo-Addo and the Vice President Mahamudu Bawumia.
While a lot of the challenges or even shocks being experienced by critical institutions such as banks are the direct effects of the bad governance of the past, the Bank of Ghana cannot be spared a portion of the blame.
The microfinance entities on the financial institution plane are distressed. Information originating from the apex bank does not speak well about their health. For those who question the efficiency of banking supervision as exacted by the Bank of Ghana, we endorse their concern wholeheartedly without looking back.
The banking supervision department of the apex bank requires interrogation to establish what has gone amiss. Eventually it must be overhauled.
The banking industry is losing public confidence as a result of the glaring turbulence. We have had enough false alarms in recent times. Although the apex bank has come out here and there to allay our fears with statements, it appears the alarms were not without basis.
There was a report about a takeover of one bank by another but the apex bank came out swiftly to deny that there was such a move. It was one of the symptoms of an ailing banking sector but denied to provide a veneer over the truth.
The Ghanaian public cannot be faulted when they confidently walk into the many microfinance outfits strewn across the country – their neon lights in the night bespeaking their prowess and high standards, because they expect the apex bank to protect them through efficient supervision.
Unfortunately such protection appears not good enough – the supervisors undertaking the routine checks appearing to have compromised their positions. In the event, customers have been exposed to avoidable risks; their savings threatened so badly that some of them wonder whether they are not inching towards the realities of the Pyram debacle of many years ago.
In an under-banked country such as ours, such symptoms can only lead to people considering alternative means of keeping their monies. The picture is not good. We need reassurance from people we can trust in the face of a waning confidence in our banks. Which bank is next?
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