The Member of Parliament for Bolga Central,
Mr Isaac Adongo, has bemoaned the absence of a clear and convincing strategy from the Bank of Ghana (BoG) and the government on how to restore confidence in the banking sector after the collapse of seven banks in a spate of 12 months .
As a result, he has impressed upon the central bank and the government to come out with clear policies and guidelines on how they intend to
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He said as part of efforts to restore confidence, the government must announce an extension of the deadline for
He explained that the extension of the December 2018 deadline was needed to ensure that more local banks did not collapse in their attempt to
He said unlike
As a result, he said, the central bank needed to treat local banks separately in its demand for the minimum capital of banks to be raised from the GH¢120 million to GH¢400 million by December this year.
“This will calm the industry and restore confidence,” he stated.
He also advised Ghanaians to have faith in the indigenous banks, explaining that their management was well-placed to address the challenges facing them and emerge
The Legislator also advised the government that instead of waiting for local banks to collapse and doll out over GH¢8 billion to bury them, it should rather put that money into a stimulus fund at the BoG.
“The government will then make their policy intention to them. Tell them if two or three of you merge and we do our valuation and you are strong, we will transfer part of the stimulus fund into the Financial Investment Trust which is a subsidiary of BoG to participate in the shareholding of the merged bank,” he explained.
“Let the BoG run the bank for three years, sell its shares back to the shareholders and go back to do its regulation job,” he added.
He said this option would have given the country more value for money and would have saved jobs as well.
“If your aim is to merge banks then you create an enabling environment for them and when they are going through difficulties, you intervene to help them out,” he stated.
He also pointed out that he did not understand how a government that owed the banking sector over GH¢5.7 billion was rather willing to spend GH¢8 billion to clean up the financial system when the payment of its debt to some of the banks could have saved them from collapsing.
“This is not just the banks but the entire financial system and this must be reversed immediately,” he noted.
“If you want to clean a financial system you don’t bring a whole industry to a standstill in order to clean the system,” he added. — GB