He said the approach was apt because there was a huge problem in the financial sector that needed to be solved.
The BoG between 2017 and 2019 combed through the financial sector of the economy.
The central bank revised the minimum paid-up capital for existing banks and new entrants from GHS120 million to GHS400 million.
According to the regulator, this was to test the viability of the banks.
The banks that were unable to meet this new requirement were either merged or collapsed. Some nine local banks, 23 savings & loans companies, 347 microfinance institutions, 39 finance houses and 53 fund management companies closed down during the exercise.
UniBank, The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank, UT Bank, Capital Bank all collapsed. Some analysts and observers criticized the BoG and the Finance Ministry over the collapse of the banks because, in their views, these banks could have been saved to continue employing Ghanaians.
For instance, former President John Mahama criticized the way and manner the government handled the banking crisis. Speaking to a group of Ghanaians as part of his campaign activities ahead of this year’s elections, Mr Mahama said: “Financial institutions have been collapsed, Ghanaians money have been locked up… You needed GH¢9 billion to save those banks and financial institutions that collapsed but because of politics, somebody decided to closed them down.
“Now Ghana is spending GH¢22 billion to pay the deposits of peoples whose moneys were lock up.
“What kind of sense is this? You won’t spend GH¢9 billion to save the banks but you pay GH¢22 billion to pay back peoples deposits and you can’t even pay. I heard the president say he has paid 98 per cent of the depositors. We should ask the depositors how have they received their money,?” Mr Mahama claimed.
He said the government could have spent GH¢9 billion to save the banks rather than allowing them to collapse and to pay deposits of customers to the tune of GH¢22 billion.
But speaking in an interview with TV3’s Etornam Sey on Monday, October 26, 2020, Mr Ken Ofori-Atta said the approach adopted by the BoG was perfect.
He said “There was a problem and we had to solve that problem. Fundamentally, was the approach necessary? No question about that, the approach was okay.”