How professional bank employees caused the banks to collapse

A professional is any person who earns living from an identified professional activity” A professional is competent, reliable and acts with integrity.

In a bank, there are various professionals; Chartered Bankers, Accountants, Risk Managers, Compliance Professionals, Auditors, Internal Controllers, Credit Managers etc. Most of these professionals belong to professional bodies with code of ethics and professional standards that guide the practice. It is sad to say that these supposed professionals ‘negligently’ failed to live up to expectation to rescue the defunct banks. Their actions and inactions over the years caused the collapse of the banks, period!

The multi-million question is how the professionals and the staff of Bank of Ghana were complicit in the collapse of the banks.

Were the professionals aware of the insolvency situations in their respective banks?

Did they consistently submit the correct prudential returns report to the Bank of Ghana? Were they aware of falsified reports to the Bank of Ghana? Did the Bank of Ghana verify reports that were submitted to it? Were mitigation measures proposed to management?

Did the banks unfailingly submit Suspiciously Transaction Reports (STR), Cash Transaction Report (CTR), Electronic Transaction Report (ETR), Level of AML/CFT compliance report, etc. to the Financial Intelligence Centre (FIC) as required by Anti-Money Laundering legislation? Did the FIC scrutinize the reports as required and given feedback or call for investigation?

Were Personality Note Forms submitted to the Bank of Ghana and the Financial Intelligence Centre for investigation and approval of key management members and Directors? Did the Bank of Ghana and the FIC approve the appointment of key persons in accordance with regulations?

Were the financial statements of the banks ‘properly’ audited and independent professional opinions expressed?

Did the Board composition meet the corporate governance requirements? Were Board reports appropriately prepared and submitted as required? Did the Board members understand the board packs or only came to drink coffee and take their allowances?

If the professionals performed their activities competently with integrity, the reasons for which the Governor of the Bank of Ghana outlined for the failure of the banks would not have existed.

I will not pretend that all the professionals in the failed banks were incompetent or acted without integrity. I had friends in the failed banks whom I know are competent but were unfortunately beaten by the circumstances around them.

I am certain that in some cases, the required reports were submitted but the Bank of Ghana failed to do their job.

I am also certain that some reports submitted to the regulators were ‘massaged’.

It is also a known fact that some employers forced professionals to act unethically or get supplanted with their subordinates.

Who doesn’t know that some employers or key management members side-line professionals and engage with the regulators to avoid submitting a report, avoid inspection, falsify a report or get an undeserved favour.

Don’t be surprised that staff of regulators put aside regulatory requirements and grant undue waivers, especially to local banks. These waivers in the long run come back to hurt the banks.

The cost of ensuring compliance, robust risk management, efficient internal control may seem to be against business interest but are for greater good.

A truly competent professional will not be part of falsifying or massaging reports, will not engage in suspicious and unethical transactions, will abide by the code of conduct and act with integrity, even to the point of resignation.

Some professionals in the failed banks and Bank of Ghana are certainly complicit in the banking sector failure that led to the reform, and so the Bank of Ghana must vigorously apply the ‘Fit and Proper Directive’ for personality assessment to ensure the sector is protected from ‘corrosive’ professionals.

The writer is an expert in Corporate Governance, Ethics, Compliance, Risk Management, Anti-Money Laundering, Internal Audit, a Writer and Trainer.

Enoch Korley Tachie
[email protected]