ModernGhanalogo

FEATURED: Re: Hon. Nenyi George Andah Was Never Hooted At Awutu Awubia Festival...

body-container-line-1
21.08.2019 General News

Akufo-Addo Blasts BoG For 'Rotten' Banks

By ModernGhand
President Akufo-Addo (middle) with members of the Council of State and Akosua Frema Osei-Opare (seated 3rd right), Chief of Staff, Office of the President. Picture Gifty Ama Lawson.
AUG 21, 2019 GENERAL NEWS
President Akufo-Addo (middle) with members of the Council of State and Akosua Frema Osei-Opare (seated 3rd right), Chief of Staff, Office of the President. Picture Gifty Ama Lawson.

President Akufo-Addo says the Bank of Ghana (BoG) should take part of the blame for sitting down unconcerned for the country to suffer the current banking sector predicament.

He said if the Central Bank in years past had acted 'responsibly', the country would not have faced a situation where about 15 banks are going out of business.

Experts say over GH¢20 billion of the taxpayers money has been pumped into the ongoing banking sector clean-up exercise just to salvage people's deposits.

The process involved huge financial bailouts to rich private individuals who owned banks but were misapplied, compelling the Central Bank to step in and clean the mess by revoking their licences.

At a meeting with members of the Council of State in Accra yesterday, the President said: “If the BoG in the years before had acted responsibly and dealt with some of these issues like it should have done, we never would have gotten in to the situation we are now.”

“It was relaxed and as a result look at the amount of money that the public has spent,” he fired, revealing that “at the first phase of the banking scandal, GH¢13 billion had to come from public funds to make sure that depositors funds were secured.”

He admitted that “finding GH¢13 billion to support my budget is a major problem to me yet this is the amount of money… So when we are talking about these matters, I don't think we should just focus on the citizens. Yes, there's the need for discipline amongst all of us but I think that the focus on what the public institutions need to do is very important.”

Background

In August 2017, the BoG revoked the licences of UT Bank Ltd. and Capital Bank Ltd., and approved a Purchase and Assumption (P&A) transaction with GCB Bank Ltd. that transferred all deposits and selected assets of the two banks after they were found to be deeply insolvent, meaning that their liabilities exceeded their assets, putting them in a position that made it difficult for them to meet their obligations as and when they fell due.

Exactly a year after, the Central Bank again revoked the universal banking licences of five banks including UniBank Ghana Limited, Construction Bank, Sovereign Bank, Royal Bank and Beige Bank and issued a licence to a newly created bank – Consolidated Bank Ghana Limited – which is wholly owned by Government of Ghana.

They were all found to be deeply insolvent.

Just last week, the BoG extended the far-reaching exercise to cover 23 insolvent savings and loans companies and finance house companies.

The companies are GN Savings and Loans Ltd., Ideal Finance Ltd., IFS Financial Services Ltd., Legacy Capital Savings and Loans Ltd., Midland Savings and Loans Company Ltd., Sterling Financial Services Ltd., uniCredit Savings and Loans Ltd., Women's World Banking Savings and Loans Co. Ltd., Accent Financial Services Ltd. and Adom Savings and Loans Ltd.

Others are AllTime Finance Ltd., Alpha Capital Savings and Loans Ltd., ASN Financial Services Ltd., CDH Savings and Loans Ltd., Commerz Savings and Loans Ltd., Crest Finance House Ltd., Dream Finance Company Ltd., Express Savings and Loans Company Ltd., the First African Savings and Loans Company Ltd., First Allied Savings and Loans Co. Ltd., First Ghana Savings and Loans Co. Ltd., First Trust Savings and Loans Ltd. and Global Access Savings and Loans Company Ltd.

---Daily Guide

body-container-line