Lapses in the enforcement of critical regulations, particularly in the financial services industry, have been attributed to the various grievous breaches which have created many challenges for stakeholders and threatened the
continuous existence of the industry .
As recent as last week, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, was forced to revoke the licences of five banks and subsequently merged them into a new bank under the name - Consolidated Bank Ghana Limited.
The collapsed banks are uniBank, The Royal Bank, Sovereign Bank, Construction Bank and BEIGE Bank. According to the BoG, these banks have committed various regulatory and financial breaches that made them insolvent and unfit to continue operations.
Explaining the origins of the new bank to take over the five, the Governor stated that Consolidated Bank Ghana Limited was established by the government and issued a licence to operate on August 1, 2018.
“Consequently, the government has capitalised the new bank to the tune of GH¢450 million and issued a bond of up to GH¢5.76 billion as assets for it,” he said.
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The bond is to make up for the gap created by the liabilities and good assets assumed by the Consolidated Bank.
The collapse of the five banks into the Consolidated Bank was part of measures to holistically address the weaknesses in the banking sector, which have a ripple effect on macroeconomic indicators.
In spite of the drastic measures taken by the BoG, it has come under a series of attacks by industry experts and members of the public who feel dissatisfied with the move and have called for more punitive measures.
For instance, there are calls for the BoG to deal with all persons who might have played a role, either advertently or inadvertently in what has dented the image of the banking sector.
First, the BoG is under incessant pressure to clean its house by first dealing with all officials, particularly in its supervisory division, whose actions and inactions have led to the unfortunate situation in which we find ourselves. This is so because many believe that if the BoG had played its role as mandated, this situation will not have arisen in the first place and, therefore, the Governor needs to be ruthless in ensuring that all those involved are out.
Secondly, there are calls for the BoG to go after the assets of the various institutions, sell and use the money to defray the huge debt left hanging. This is expected to serve as a warning to the other players in the sector to sit up and do what is right and in accordance with the law.
Much as the GRAPHIC BUSINESS fully supports these calls, we believe that it is equally imperative for the BoG to take issue with the auditors of the collapsed banks. In the audited accounts of the various banks, it was clearly stated that the banks were in good shape and
We also want to prevail on the central bank to ensure that those involved in any criminal acts that led to the collapse of these banks must be prosecuted. This means that the BoG will have to immediately furnish the investigative agencies with all the necessary information to enable them to take drastic action.
Finally, we will want to entreat the investigative agencies who will be tasked to investigate the issues to do a diligent work and act speedily to bring the nation wreckers to book.
Ghanaians have had enough of these kinds of rot in the system and this should be used as the basis to get the system corrected for the better.