21st June 2024

Dr Ernest Addison, Bank of Ghana governor

All customers of the nine defunct banks and 95 per cent of customers of Specialised Deposit-taking Institutions (SDIs), which were affected by the banking sector clean-up, have received their deposits.

Dr Ernest Addison made this disclosure yesterday when President Nana Addo Dankwa Akufo-Addo visited the Bank of Ghana to familiarize himself with the operations of the central bank.

Touching on deposits of customers of GN Savings and Loans and First Allied Savings and Loans, he noted that, over the last three weeks, all the affected customers have been paid.

“The Government has provided a bond worth GH¢1.7 billion, for which we have monetized GH¢700 million. So, the receiver is also working at clearing the last few customers that are left in that segment. So, I think that we have made a lot of progress, Mr President, with this depositor issue,” he added.

Averting measures

On helping to ensure the maintenance of a strong banking sector in the country, and to prevent the recurrence of a banking crisis, Governor Addison told President Akufo-Addo that the first step taken was the passage of the new corporate governance directive.

This, he said, had become necessary because at the heart of the financial sector crises was a breakdown in corporate governance in the various banks whose licenses were revoked.

“The second one has to do with misreporting of data, because of a lot of falsification of data by the financial institutions to the central bank. So we have brought in a new technology which will allow us to get the data directly from sources, so that no human interventions will be in there to distort the data that they send,” the Governor indicated.

The third step, he added, “has to do with the capital verification process, because a lot of the banks reported that they had capital when, in fact, they didn’t have any capital at all.”

He continued, “So we have reviewed the entire capital verification process of the bank, and it’s almost impossible now for us to have a bank that doesn’t have any capital, and yet it’s allowed to operate, and, of course, in addition to that, for all the staff of the banking solution department we have had a lot of training programmes with the IMF and other technical assistance have been provided.”

The Governor commended the President for the role he played in dealing with the crisis, saying his leadership offered him and his team the confidence to take the decisions they took to deal with the mess.

Well done

In return, President Akufo-Addo also commended BoG for ensuring a stable micro economy and clear business environment, despite the impact of the Covid-19.

He described as refreshing the solid cooperation between the central bank and the Finance Ministry which has triggered indicators showing that the economy of the country is bouncing back.

According to the President, there is a revival of confidence as well as suggestions that things are picking up again, “and we need to do whatever is necessary to make sure that it continues.”

On the banking sector reforms, he asked the central bank to do more in the area of publicity, by informing Ghanaians about the measures it has taken to ensure that the events that caused the crisis are not repeated.

“I don’t think there is sufficient publicity about these measures and I think an occasion like this gives you the opportunity to explain to the Ghanaian people the measures that have been put in place so that these events do not reoccur,” President Akufo-Addo said.

 

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