The Trades Union Congress TUC has called for a thorough investigation and prosecution of persons whose actions or inactions led to the collapse of some indigenous banks.
According to the union, a punitive measure against the culprits will deter others in the financial sector from such improper activities.
The Bank of Ghana on Thursday announced the consolidation of five banks into a new entity called the Consolidated Bank Ghana limited, which is 100 percent state-owned.
They are Beige Bank, The Construction bank, The Royal Bank, UniBank and Sovereign Bank.
It said the banks had flouted some laws.
But speaking on Citi TVâ€™s current affairs show, The Point of View, Economist and Policy Director of TUC, Dr. Kwabena Nyarko Otoo said the central bank should go beyond the consolidation and punish anybody found culpable.
â€œWe need to strengthen regulation and enforcement. Those that are found not to have done the right thing, either on the side of the Bank of Ghana or the defaulting banks must be properly brought to book. And that is the only way you can prevent such a regulatory slip or failures, regulatory negligence.â€�
Among other things, some of the consolidated banks some of the banks obtained their licenses under false pretenses.
â€œIn the case of Sovereign Bank Limited, as part of Bank of Ghanaâ€™s investigations into the failure of Capital Bank Limited (currently in receivership), it emerged that Sovereign Bankâ€™s licence was obtained by false pretenses through the use of suspicious and nonexistent capital,â€�Â the Bank of Ghana boss, Dr. Ernest Addison stated at a press conference on Wednesday.
â€œBeige Bank and Construction Bank were each granted provisional licenses in 2016 and launched in 2017. Subsequent investigations conducted by the Bank of Ghana, revealed that similar to the case of Sovereign Bank, both banks obtained their banking licences under false pretenses through the use of suspicious and non-existent capital, which has resulted in a situation where their reported capital is inaccessible to them for their operations.â€�
GHc400 million capital requirement struggle
The Bank of Ghana gave the banks in Ghana until the end of 2018 to raise a GHc400 million new capital requirement or risk being shut down or becoming a microfinance or savings and loans institutions.
Whereas the foreign-owned banks are not complaining, the local ones have asked the Bank of Ghana to extend the deadline for recapitalization.
They also petitioned the Presidency to intervene on their behalf.
But the central bank among other things advised them to join forces and recapitalize or risk having their licenses revoked.
The Governor of the Bank of Ghana, Dr. Ernest Addison about a week ago disclosed that some 15 banks are set to meet the new minimum requirement which meant that 19 others would have to resort to various options available to them in order not to miss the deadline.
By: Jonas Nyabor/citinewsroom.com/Ghana
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