Recapitalization Not Cause Of Bank Problems

The Minister for Finance, Ken Ofori Atta has debunked claims that the recapitalization policy directive from the Bank of Ghana is the cause for the current crisis in the banking sector.

Speaking at a forum organized by the Danquah Institute recentlyon the current clean-up in the banking sector, he said “The push toward recapitalization has nothing to do with the problem we are trying to solve. That’s a whole different issue to ensure that we make the banks stronger so that they can continue with the business of intermediation that is being required.”

Ken Ofori Atta however blamed shareholders and directors of the collapse banks for the current banking crisis.

He said the banking crisis is due to plain thievery on the part of some directors of the defunct banks.

“The heart of the matter is that it is really plain thievery on the citizens by certain bank shareholders and directors, also, with a clear compromise of the regulatory leadership on a scale that have not happened before in our country’s history,” he said.

The Bank of Ghana within the last twelve months has revoked the license of seven defunct banks.

According to the central bank, whereas some of the banks had become “deeply insolvent,” others acquired their licenses through suspicious means.

However, the Finance Minister has mentioned that his Ministry has begun a ‘clean up’ exercise to wipe out financial institutions that are not meeting up the standards of the Ministry and that of BoG.

According to him, owners of the defunct banks who are found to have engaged in malpractices and illegalities associated with their set up and operations would be prosecuted.

“As long as we go ahead to clean up and to prosecute so that it doesn’t happen again. But first and foremost a contagion towards economic crisis has been eliminated [and] we confident about that.” He said.

He further mentioned that his Ministry is working to ensure investors and depositors moneys are safe.

The forum was aimed at assuring investors and depositors of the safety of their funds.

By Emmanuel Yeboah Britwum