BoG completes clean-up of banking sector

Governor of the Bank of Ghana Dr Ernest Addison[/caption] The Bank of Ghana says it has completed the clean-up of the banking sector which started in August, 2017. The clean-up started with the revocation of licenses of UT Bank and Capital Bank with their assets handed over to GCB Bank. The major shake-up of the sector was, however, on Wednesday, August 1, 2018, when five banks viz uniBank, Beige Bank, Royal Bank, Construction Bank and Sovereign Bank were consolidated into the Consolidated Bank Ghana Limited. Later, the Central Bank shut down 347 microfinance companies of which 155 had ceased operations. Nineteen micro-credit companies and money lenders also had their licenses revoked. On Friday, August 16, the last whip was cracked by the Bank of Ghana with the revocation of the licenses of 15 savings and loans companies and eight finance house companies. Two non-bank financial institutions, according to the Central Bank, had already ceased operations. A statement issued by the Bank said the clean-up is in accordance with Sections 123 to 137 of Act 930 and it is fundamentally to protect the interest of depositors. “The Bank of Ghana has with effect from today, completed the clean-up of the banking, specialized deposit-taking (SDI), and non-bank financial institutions (NBFI) sectors which began in August 2017,” the statement said. The Governor, Dr Ernest Addison, has however indicated to that legal actions will be taken against officials whose negligence led to the collapse of some of these financial institutions. That, to him, will see the end of the reforms.

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The Central Bank has assured that it will remain vigilant and intensify on-site examinations to ensure that the remaining institutions remain resilient. It says it will sanction for non-compliance “with statutory, prudential and other requirements, and ensure that early warning signs of distress are mitigated by regulated institutions expeditiously”. “The Bank of Ghana will also work with ARB Apex Bank to reposition the rural and community banking sector, to enable them to better support rural economic development.” It says it will launch the commencement of operations of the Ghana Deposit Protection Scheme in September 2019, with the help of government, to further strengthen protection of depositors’ interests. By Emmanuel Kwame Amoh||Ghana ]]>