President Nana Addo Dankwa Akufo-Addo says the seven banks that have gone under in the past year were “inefficient, poorly managed banks”.
According to President Akufo-Addo, most of them had poor governance structures and poor risk-credit policies.
He said the Central Bank was, without any end in sight, injecting taxpayer’s monies into giving support to these banks.
He mentioned that as much as GH¢8 billion was dispensed to support the banks without any headway.
“So the Bank of Ghana stepped in and the regulatory measures that it has taken are those that have resulted in the takeover or dissolution if these seven banks.”
President Akufo-Addo was speaking on the banking issue for the first time on Thursday 6 September, when he met a cross-section of the Ghanaian community in Kigali, Rwanda.
The turbulence in the banking sector has seen seven indigenous banks taken over by two banks – one a newly established one.
In August, 2017, UT Bank and Capital Bank were handed over to GCB Bank Ghana Limited as a result of major operational lapses including mismanagement of liquidity.
On August 1, 2018, the Central Bank ceded five other banks – Royal Bank, uniBank, Sovereign Bank, Construction Bank and Beige Bank – to newly established Consolidated Bank Ghana Limited.
According to President Akufo-Addo, the two major indigenous banks – GCB and Consolidated – are going to “provide the leadership in the indigenous banking sector that is required”.
“We cannot have – and that is the clear intention of government – a situation where the governing banks in our country are all foreign banks.
“It is very dangerous for our future if we allow that to happen.”
He said since the operation of banks have some influence on economic performance, Ghana’s economy was at risk given the manner in which the banks were being managed.
He insisted, however, that the market is really “tough and a rigorous place”.
But the measures are all in good faith to keep the indigenous banking sector afloat “and not a question of we going through a process to eliminate the indigenous banking sector from the banking system of our country”.
“That is very dangerous. It won’t make sense at all.
“On the contrary, the process of rationalization is to enable us emerge with a stronger set of indigenous banks who can then help us grow our economy.”