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MORE TROUBLES FOR COLLAPSED BANKS: DIRECTORS FACE INVESTIGATIONS AND PROSECUTION

Business & Economy

All seven collapsed banks cited by the Bank of Ghana(BoG) to have abused processes that led to their collapse, and the loss of jobs on the part of workers as well as investment by customers, are to face a team of investigators for their role in the first-ever Ghana bank crash.

All seven collapsed banks cited by the Bank of Ghana(BoG) to have abused processes that led to their collapse, and the loss of jobs on the part of workers as well as investment by customers, are to face a team of investigators for their role in the first-ever Ghana bank crash.

Speaking at last Wednesday’s Meet the Press at the Jubilee House, President Nana Akufo-Addo revealed that a special investigations team had been put in place to undertake criminal investigations into the failures of the seven banks for possible prosecutions by the relevant state agencies.

No sacred cow

According to the President, “no one found complicit will be spared.”

Additionally, he said the Bank of Ghana is conducting its own internal investigations into the conduct of its officials (past and present) that could have facilitated wrongdoing at the banks.

Throwing more light on the banking sector crash, the President noted that his administration inherited a financial system that was under a considerable state of distress, with banks that were known to be insolvent as far back as 2015, and banks that had been licensed without the requisite capital, still operating.

BoG prop

Some of these banks, he said, were surviving day to day only by virtue of liquidity support from the Bank of Ghana (BoG) with the underlying problems that plagued them remaining unresolved.

“To protect depositors’ funds as well as to prevent contagion from these failed banks to the rest of the financial system, the new administration of the Bank of Ghana took some courageous measures in the public interest, to clean up the banking system and to put it on a stronger and more resilient path,” he said.

President Akufo-Addo continued, “There is no doubt that the failure of the seven banks came at a cost to the Ghanaian taxpayer and staff of the affected banks.”

Intervention

He noted that the bold decision taken by the BoG and the financial support Government provided resulted in the establishment and funding of the Consolidated Bank Ghana Limited. This, he added, has ensured that deposits of more than 1.5 million customers with deposit values of over GH¢10 billion and about 70 per cent of the 5,000 jobs in the affected banks were saved.

The President explained that it was important to alleviate the severe adverse outcomes that could have occurred.

“It is important that the costs of these interventions, which were borne by taxpayers, are recovered to the extent possible through recoveries from debtors, shareholders, and related and connected parties who took money from the defunct banks,” he said.

The President also disclosed that receivership processes are ongoing, noting that the receivers are making great strides in their recovery efforts. He indicated that amounts in excess of GH¢400 million had so far been recovered by the receivers of the two banks closed last year.

Bank recapitalisation

According to the President, the recapitalisation efforts by banks have been very successful so far, with about 22 banks already meeting the new minimum capital of GH¢400 million.

The 22 banks that have met the new requirement include a good number of indigenous banks, whilst a few others are in the final stages of meeting this requirement, he disclosed.

“I am confident that, at the end of the exercise, we will have a stronger, more resilient banking sector with a strong indigenous presence, well-positioned to finance the next phase of our agenda of economic growth,” the President added.

                   

 

 

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