The Bank of Ghana (BoG) has been challenged to frequently publish full disclosures on the performance of banks to enhance transparency and promote informed industry decisions.
At the Graphic Business/Stanbic Bank Breakfast Meeting at the Labadi Beach Hotel yesterday, an expert in the banking sector, Nana Otuo Acheampong, and the Corporate Credit Manager at the Barclays Bank, Mr Solomon Kwashie Kofigah, said although banks published periodic financial statements, they were often scanty and did not reflect the true financial position of the banks.
“The financials that the banks publish are only for a period but on a daily basis, things happen and banks report their activities to the BoG, so what we are asking the BoG to do is, for instance, make available the set ratios that banks are required to meet because these signs determine whether a bank is heading into danger or not.
“ The BoG should also publish such details so that in as much as the banks are compelled to publish them on their own, when the investing public see such figures on the BoG website, as the regulator, they could be guaranteed that these are certified numbers that can be worked with,” Mr Kofigah stated.
He added that such timely disclosures were needed since banks did not give full disclosures in their financial statements, “so for instance if a bank tells you their non-performing loans ratio is a certain figure, how do you know what are in that non-performing loans bracket, can they tell you the sectors that they are coming from and the key clients or companies that are in that non performing loans list?” he inquired.
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The breakfast meeting, held on the theme, “Liquidity and solvency management — boosting the health of banking in Ghana,” was the second of its kind to be organised by the two institutions this year for experts to deliberate on key issues affecting the economy.
The second Deputy Governor of the BoG, Ms Elsie Addo Awadzi, responding to some of the issues raised on transparency in the financial sector said as part of its supervisory role, the BoG conducted special audits on financial institutions in a bid to strengthen the sector.
She added that such interventions were aimed at improving the solvency of banks to ensure that the management of banks in the country were being carried out according to the laid-down laws governing the sector, but called on the investing public to be vigilant and enquired from their banks how they were investing customer deposits.
“ Be rest assured that we, as regulators, are doing our best; but you as users of banking services must do your part, ask questions, why are you paying so much interest and what are you investing the money in?” she said.
However, the Senior Country Partner at Pricewaterhouse Coopers (PwC), Mr Vish Ashiagbor, reacting to the same concerns raised, said although the BoG had to ensure that the management of banks was done in a transparent manner, “ultimately, the governance of a bank will determine if it will remain in business or not”.
He indicated that the BoG might not know the day-to-day activities of banks and, therefore, called on managers and shareholders of banks to be disciplined to ensure the solvency of banks.
Measures to curb malpractice
Meanwhile, the BoG is fine-tuning a whistle-blowing policy that will encourage the general public to pass on confidential information on malpractices in banks for thorough investigations to be undertaken and appropriate sanctions applied.
The policy, which will be the first of its kind by the central bank, will also prescribe protections for whistle-blowers as part of a grand strategy by the bank to help encourage whistle-blowing on banks in the country.