The ongoing reforms in the banking sector will reinforce consumer confidence in the financial system rather than dampen it, Mr. Patrick Fiscian-Chief Executive Officer of Heritage Bank, has said.
According to him, recent steps by the Bank of Ghana (BoG) aimed at sanitising the banking industry are not only self-assuring but will instil consumer confidence back into the sector, as the banking public will be now be more confident about the safety of their funds.
“Where you have a regulator willing to take strong action it can only lead to a well-governed banking industry, and that will only serve to make the industry stronger as consumers will be more confident in the safety of their funds,” Mr. Fiscian told the B&FT in Accra.
His comments come on the back of Bank of Ghana revoking the licences of five banks – BEIGE, Sovereign, Construction, uniBank and Royal Banks – deemed as either insolvent or having procured their licences through false pretense; and the transferring of their deposits, assets and liabilities to a newly-created entity christened Consolidated Bank Ghana Limited.
On whether the ongoing reforms will negatively affect consumer confidence, Mr. Fiscian said: “On the contrary; once the central bank has demonstrated a willingness to take robust action, consumers will be comforted by the fact that there is a regulator out there looking after their interests.
“You may find instances of persons who want to operate outside the banking system, but in general I believe recent actions by the central bank will only serve to increase confidence in the banking sector – and in the long-term will serve to strengthen the industry,” he further noted.
The Heritage Bank boss, who was speaking at the media launch of the 2nd Edition of the Ghana SME and Young CEOs Summit, further explained that as an industry the banking sector is governed by laws and regulations, and that it is the regulator’s role to ensure banks comply with set rules.
“So, if in the view of the regulator certain laws have been breached and we have the banking system being put at risk, I think it is appropriate it takes necessary action to maintain consumer confidence in the banking sector.”
Going forward, he indicated that building a solid banking sector is remains a joint responsibility of different actors, including management, directors, auditors and regulators. “So, it is important that we are all alert to our responsibilities by playing our necessary roles to ensure our banks are well-governed.”
2nd SME and Young CEOs Summit
This year’s SME and Young CEOs Summit, which is on the theme ‘Corporate leadership, governance and technology: strong pillars for business and economic growth’, is slated for September 2018.
Dr. Daniel McKorley, Chief Executive Officer of McDan Group and Chairperson of the media launch, underscored SMEs as being very crucial to the country’s development.
“I consider SMEs as a critical piece in Ghana’s economic development jigsaw. They employ millions of citizens and in addition play a role in the supply chain of many industries.
“The SME and Young CEOs Summit is therefore a much-necessary platform to encourage them and celebrate their role in the economy,” he noted.
Commenting on the theme for this year’s summit, he said it was specially chosen to reflect the importance of good leadership and corporate governance to the success of businesses, especially SMEs.
Coupled with technology, he said sound corporate governance remains important to the sustenance and growth of businesses.
“As you may be aware, among the prominent reasons for the collapse of some of our banks over the past one-year is the issue of poor corporate governance. This weak oversight over activities of financial institutions has caused seven banks to lose their licences and created net liabilities of approximately GH¢8billion, which the country has had to borrow to fund,” he further stated.