Chief Operations Officer of Dalex Finance Finance Mr Joe Jackson has wondered how exactly Former president John Dramani Mahama is going to restore the licenses of the banks that in his view were unjustifiably collapsed during the recapitalization exercise undertaken by the Bank of Ghana (BoG).
Speaking on the Business Focus programme on TV3 Monday, May 15, Mr Jacskon indicated that there were several challenges in the financial sector that made the intervention of the central bank justified.
“You have got to be clear that there were a lot of challenges in the financial sector, huge challenges, some of the institutions were in deep trouble such that there is arguably a legitimate reason for the central banks stepping in.
“You may disagree with the process but you cannot disagree with the premise that these institutions were in trouble.
“The caveat is they were unjustifiably shut down. First of all, we have to wait and see who can claim legitimately that they unjustifiably shut down but the bigger problem is this, it is going to be some seven or eight years after the event, even if you win, how are you going to entangle this?
“At best, maybe you will compensate the owners and the shareholders,” he said while reacting to a promise by the newly-elected flagbearer of the National Democratic Congress (NDC) to restore the licenses of the banks that were unjustifiably collapsed.
Delivering his formal acceptance speech at the University of Development Studies (UDS) on Monday, May 15 after his victory as flagbearer of the National Democratic Congress (NDC) on Saturday, May 13 he said “we shall promote robust, local participation in our banking and financial, telecommunication, tourism, mining and agric and manufacturing sectors to grow our economy and create sustainable employment for our youths.
“We will restore indigenous Ghanaian investments in the finance and banking sector and we will create a tier banking system that will serve various segments of the market.
“We will give the opportunity to experience banking hands who were laid off needlessly to secure their careers once more and move away from the menial jobs that they were compelled to take.
“As far as practicable the banking licenses that were unjustly canceled by this government will be restored.”
The central bank revised the minimum paid-up capital for existing banks and new entrants from GHS120 million to GHS400 million. According to the regulator, this was to test the viability of the banks.
The banks that were unable to meet this new requirement were either merged or collapsed.
Some nine local banks, 23 savings & loans companies, 347 microfinance institutions, 39 finance houses and 53 fund management companies closed down during the exercise.
UniBank, The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank, UT Bank, Capital Bank all collapsed. Some analysts and observers criticized the BoG and the Finance Ministry over the collapse of the banks because in their views, these banks could have been saved to continue employing Ghanaians.