Bank Crisis: Governor’s comments causing panic withdrawals – Gatsi

A renowned economist and lecturer Professor John Gatsi has attributed the panic withdrawals that have hit local banks in the country to the public comments of the Central Bank Governor Dr. Ernest Addison.

According to him, the seeming consistent manner the governor hits at the non-performance of the local financial institutions creates panic among the citizenry.

Dr. Ernest Addison has in his recent comments noted the Central Bank will be liquidating some microfinance institutions over insolvency challenges. He said some of those firms have shown signs that they are struggling and may not be able to stand on their own.

The hint comes as Ghanaians are yet to settle on the shock of having seven local banks being wiped off by the Central bank as a result of liquidity challenges. The banks, including the largest indigenous bank – unibank- are now under new Consolidated Bank Ghana Limited.

Following the development, local banks have been hit with panic withdrawals from their customers over fears of safety of their deposits despite assurances from the Central Bank.

Speaking to Francis Abban Thursday, Dr. Gatsi said the Central Bank governor must be mindful of how his utterances affect the financial institutions.

“As a governor, when you make statements about banking institutions not performing, panic withdrawals hit the local banks. If panic withdrawals hit banks within a week, those banks can collapse”.

He however advised local financial institutions to be updating their customers on the state of affairs to reduce panic among them.

“If I were a microfinance operator, I would focus on my books and be sending information to my clients about how safe their investments are (only if that is the case) so they do not panic”.