Banks closure: BoG Governor should apologise to Ghanaians – Adom-Otchere

Good Evening Ghana’s host Paul Adom Otchere has expressed his outrage at the Bank of Ghana’s refusal to take responsibility for the revocation of licenses of the five banks, now under the Consolidated Banks of Ghana.

Assuming that that would have been the BoG governor’s early statement at the press conference held to address the issue, Mr Adom

Read full articleOtchere took to Joy News’ Newsfile to breathe his disappointment at the BoG.

He insisted that “the governor and his people at this stage should come out and apologise for what has happened.”

Alas, that has not been the case as the Central Bank has only shifted blame on to the affected banks, claiming that, “the licenses were acquired under false pretences,’ according to Mr Otchere Darko.

He directly accused the Bank of Ghana of being “derelict in your [BoG’s] duty” because of how the licenses were given out to these banks under ceremonies, one of which was attended by Dr Addison himself. “Then you took pictures with them when they were inaugurating Construction bank and brought the whole government machinery there,” he said, implying that the Bank of Ghana had to know if the documentation submitted could have been forged.

He read the law that mandated the Bank of Ghana to have gone about licensing the right way: Section 4 of the law says that Bank of Ghana may for the purpose of verifying the particulars submitted under section 2, which is to collect a license, a. Interview a promoter, a proposed director or key management personnel in the course of the verification and inspect the books, records and premises intended for the use of the bank or specialized deposits-taking institution. The Bank of Ghana may require that information supplied to the Bank be verified, certified, or otherwise authenticated in the manner that the bank may prescribe.

Per this, the current situation can only be blamed on the Central Bank for its negligence of its duties and for this negligence, an apology to everyone involved is absolutely necessary. “To apologise to the people of Ghana, having been given a responsibility upon an elevated Act 930. And then you come and tell us that they collected licenses by false pretences,” he quizzed.

He proceeded with more constitutional mandates that were clearly not followed because of the situation the affected banks find themselves in right now.

“b.The feasibility report submitted by the applicant under section 7 is based on sound analysis under reasonable assumptions. That the proposed directors and key management personnel of the applicant are fit and proper persons. c. the significant shareholders are suitable and the ownership structure of the proposed bank or specialized deposit-taking institution will not hinder effective supervision, including supervision on a consolidated basis. But the paid up capital of the applicant is adequate and the original source of the capital are acceptable and does not include borrowed funds.”

He fumed that the governor of the BoG deserved no accolades whatsoever for the revocation of the licenses that have been the doom of the banks involved.



Background

The Bank of Ghana took measures to revoke the licenses of five banks, namely; uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited as part of its efforts to address legacy problems in the banking sector and to restore the stability and resilience of the financial system.

While some of the weaknesses in the sector were attributable to macroeconomic factors, a trend of poor corporate governance, poor risk management practices, related party transactions that were not above board, regulatory non-compliance, and poor supervision (questionable licensing processes and weak enforcement) had emerged over the years, leading to a significant build-up of vulnerabilities in the sector.

The banks have been merged into one Consolidated Banks of Ghana and Mr. Nii Amanor Dodoo of KPMG has been named receiver of all the banks.