Financial sector cleanup can ‘never’ be over - Corporate Governance Consultant
Corporate Governance Consultant, Marian Barnor has rubbished statements made by the Bank of Ghana a month ago to suggest that it has completed its clean-up exercise in the banking and specialized deposit-taking (SDI), and non-banking financial institutions (NBFI) sectors.
According to her, the financial sector clean-up cannot be over so long as there are people working in the industry with greed and incompetence.
Speaking at a financial forum in Accra, she said, “Clean-up is continuous and if we don’t do it in a continuous way and we do it in such a drastic manner, we’ll have the effect that we are having now. Let’s be reminded that clean-up is continuous... The minds of men are very inventive and ingenious in crafting skips for self-interest so it will happen again because the human mind; greed, selfishness coupled with either incompetence or indifference in the boardroom will make it happen again”.
Responding to the claims made by the Corporate Governance Consultant, Head of Banking Supervision at Bank of Ghana, Osei Gyasi noted that, though the clean-up is over, if any bank falls foul of the law, it would be dealt with.
He said, “Even though we’ve come out to say that clean-up is over, that doesn’t mean that we are going to relax and will not enforce the laws...the clean-up is over but the reforms are not over”.
As part of Bank of Ghana’s efforts to restore confidence in the banking and specialized deposit-taking sectors, it embarked on a clean-up exercise in August 2017 to resolve insolvent financial institutions whose continued existence posed risks to the interest of depositors.
BoG in a statement explained that the actions “were taken in pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent. The Bank of Ghana has also appointed Mr Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930".
On May 31, 2019, BoG revoked the licenses of 347 institutions and 39 microcredit institutions operating in the country. Some of these affected banks resorted to merging hence, the functioning of the Consolidated Bank Ghana limited.
So far, a total of 420 financial institutions have been insolvent and have had their licenses revoked.