President Nana Addo Dankwa Akufo-Addo has for the first time commented on the ongoing banking sector reforms in the country.
According to the President, the ongoing clean up is not intended to collapse any bank but rather to build strong local banks in the country.
He was addressing the Ghanaian community in Rwanda as part of his visit to that country at the invitation of the President Paul Kagame, to participate in the African Green Revolution Forum (AGRF), being held under the theme “Lead, Measure, Grow: Enabling new pathways to turn smallholders into sustainable agribusinesses.”
The president’s comment comes after seven local collapsed after they were declared insolvent by the Bank of Ghana.
He said: “There has been some controversy in Ghana over, for instance, the situation in the banking sector and you’ve about it. The decision that the central bank has taken which has affected seven important indigenous banks who were being supported by the taxpayer through the Bank of Ghana.
“Altogether the indebtedness of these seven banks amount to some GH¢8billion that the Bank of Ghana used to support these banks. That’s not I’m sure medium or long-term solution that we can support. That the bank of Ghana we will be taking taxpayers money to support inefficient, poorly managed bank. So the bank of Ghana stepped in and the regulatory measures that it has taken are those that have resulted in the takeover/dissolution of these banks.”
According to him, “We are trying to make sure that the banking sector of the country has strong indigenous banks which can compete successfully with foreign own banks.”
“It’s not a question of we are going through a process in order to eliminate the indigenous banking banks from the banking system of our country. That’s very dangerous. It won’t make sense to do that at all. On the contrary, the process of rationalisation is to enable us to emerge with the strongest set of indigenous banks who can then help grow our economy,” he stated.
The Central Bank’s regulatory cleanup in the banking sector has to the collapse of some seven indigenous banks. The collapsed banks are; Capital, UT, Sovereign, Royal, Beige, Construction and uniBank.
Five of the aforementioned banks – Sovereign, Royal, Beige, Construction and uniBank have since been merged into one entity under the name Consolidated Bank of Ghana.