The Central Bank has somewhat admitted culpability in the collapse of some five financial institutions in the country.
On Wednesday, the Bank of Ghana (BoG) announced the merging of five banks to form Consolidated Bank Ghana Limited.
The beleaguered banks are: UniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited.
Banking Licenses Obtained Under False Pretenses
BoG explained that Beige, Sovereign and Construction banks obtained their banking licenses under false pretenses through the use of suspicious and non-existent capital.
“Beige Bank and Construction Bank were each granted provisional licenses in 2016 and launched in 2017. Subsequent investigations conducted by the Bank of Ghana, revealed that similar to the case of Sovereign Bank, both banks obtained their banking licences under false pretenses through the use of suspicious and non-existent capital, which has resulted in a situation where their reported capital is inaccessible to them for their operations,” the BoG said.
Heads Must Roll
Following news of the BoG's decision to merge the 5 banks, some financial analysts have held that the malpractices and illegalities at the banking supervision department of the Bank of Ghana could have been avoided if the BoG had enforced stronger due diligence practices.
Some also argue that to inhibit others from replicating such practices, the Central Bank must arrest and indict, and maybe prosecute and jail its officials at the banking supervision department, as well as owners of the banks found culpable for the illegality.
Supervisory Role Not Adequate
Speaking to the issue in an interview with Kwami Sefa Kayi on PeaceFM's "Kokrokoo" Thursday, Mrs Elsie Awadzi, 2nd Deputy Governor of the Bank of Ghana admitted that even though the banks were at fault, the "supervisory role" at the Bank of Ghana was "not adequate".
"We have therefore put things in place to enhance supervision and to ensure things like this don’t happen again. We are determined to change some of systems and processes for banks to perform better...we need to make our banking system better," she added.
Meanwhile, BoG has appointed Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.
Source: Rebecca Addo Tetteh/Peacefmonline.com
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"BoG explained that Beige, Sovereign and Construction banks obtained their banking licenses under false pretenses through the use of suspicious and non-existent capital". This is what is exactly going on with most of the Micro-Finance institutions and Banks
@ Aluta working in the bank for 20 years plus does not give automatic promotion. If you sleep on the job during this period, there is no supervisor who will recommend your promotion. Integrity, Hard work and being responsible should be the hallmark. If political appointee can deliver, should they be kept outside because somebody has been there for 20 years? If the person is not being promoted has he been appraised by his supervisors and what has been the outcome. Promotion should not be linked to long service as it is happening in the public sector now.
THERE IS TOO MUCH INTERFERENCE OF GOVERNMENTS IN THE AFFAIRS OF THE BANKING SECTOR. OLD STAFF OF BANKS ARE NO LONGER CONSIDERED FOR JOB PLACEMENTS AND PROMOTIONS IRRESPECTIVE OF YOUR EXPERIENCE OR QUALIFICATIONS.. FAMILY, FRIENDS AND CRONIES INCLUDING GOVERNMENT IMPOSITION OF THEIR SUPPORTERS ON THESES BANKS IS THE NORM IN GHANA. IT IS WORSE IN PLACES LIKE GCB BANK WHERE PEOPLE HAVE WORKED OVER TWO DECADES (TWENTY YEARS) AND MORE ARE JUST PINNED DOWN WHILE PARTY FUNCTIONARIES AND MANAGEMENTS FAVORITES ARE BEING CONSIDERED FOR JOB PLACEMENTS AND PROMOSITIONS. SQUARE PEGS ARE BEING PUT IN ROUND WHOLES. IT IS ALL OVER AND I GUESS BANK OF GHANA IS NO EXEMPTION TO THIS. THE WRONGS MUST BE CORRECTED.
I told someone Biege Bank will collapse just like UT. if you use crude and wicked way to take peoples property and money God will not sit still. He will speak. Biege Bank when Biege Capital used dubious ways to take massive lands and properties from poor teachers and other private Ghanaian. The hand of God is on you. The consolidated bank will also collapse. All those banks are ***barred word*** and political Banks.
I thank the Deputy Governor for her honesty. there is no bank in Ghana that will collapse without all the following factors in existence. 1. Inadequate and compromised supervision by official of Bank of Ghana 2. Compromised by the external auditors in expressing their opinion as independent auditors. 3. Bad Corporate governance. Let get the various on-site examination reports and the response of same from the Bank of Ghana. let also get a copy of the management letters by their external auditors. you will see the various violations,irregularities and the compromised from people we claim to be professionals. Very shameful The Bank of Ghana should extent same actions to the rural and community banks, savings and loans and the micro-finance companies. we will see the real mess in the financial section. it a shame!!!!!!!!!!!!!!!!!!!