BoG Must Be Monitored After banking Sector Clean-up – Lawyer

Private legal practitioner, Martin Kpebu has called on Civil Society Organizations (CSOs) in the country to keep the Bank of Ghana (BoG) on its toes in the aftermath of the banking sector clean-up.

According to him, the CSOs must keenly supervise the work of the central bank to enable it discharge its mandate creditably devoid of any invisible political influences.

Speaking on Citi FM/Citi TV’s news analysis programme, The Big Issue on Saturday, Mr. Kpebu said strong and vibrant CSOs will ensure a better banking sector for all.

“The monitoring, especially from CSOs, is very key because as the Bank of Ghana is monitoring, CSOs also need to monitor. Who watches the watchman? Once the CSOs and the media carry it, the politicians will know that the populace is watching then they will back off. Because the political patronage will always remain large in government institutions, we need CSOs to be up and doing,” he said.

Background

Governor of the Bank of Ghana, Dr. Ernest Addison, on Friday made some major pronouncements concerning the fate of the banking sector following the recapitalisation of the sector.

Banks in the country were given up to December 31st 2018 to recapitalize from GHc120 million to GHc400 or risk losing their licenses.

Prior to the expiration of the deadline, the central bank had revoked the licenses of some seven banks which, according to them, were insolvent, with some engaging in alleged fraudulent deals.

Some had also squandered liquidity support given to them by the central bank.

The Bank of Ghana allowed the GCB bank to take over two of the banks in 2017 namely Capital and UT, and in 2018 merged the remaining five into the Consolidated Bank Ghana Limited.

Other banks that were struggling to meet the minimum capital requirement entered into merger agreements.

The Central Bank Governor announced that some of the banks that could not meet the GHc400 million but were solvent, will receive support from the Ghana Amalgamated Trust made up of some private pension funds in the country.

The five banks are: ADB, NIB, merged Omni/Bank Sahel Sahara, Universal Merchant bank, and Prudential bank.

Two additional banks, Premium and Heritage banks also had their licenses stripped and were merged with Consolidated bank.

Amalgamated Trust arrangement not bailout for banks – Gov’t

The five banks being cushioned under the Ghana Amalgamated Trust (GAT) arrangement must not consider the support they are receiving as a bailout programme, the Finance Ministry has warned.

It said in a statement released on Saturday that: “the GAT arrangement is to support solvent and strong indigenous banks to meet the new minimum capital requirement, and is not a bailout programme for banks that have been resolved by the Bank of Ghana.”

Source: citinewsroom