Finance Minister Ken Ofori-Atta has said the Nana Akufo-Addo-led government is ‘satisfied’ with the banking sector now after a restructuring ‘tsunami’ that led to the 'collapse' of some banks.
He told host Kwami Sefa Kayi on PEACE FM’s morning show ‘Kokrokoo’ that, “there is a lot more confidence in our banks now”.
Ken Ofori-Atta was emphatic that the banking sector is the foundation of the country’s economy so his administration needed to take some rarely bold measures which they did.
“Now when you go to the banks there is a lot more confidence, there are more resources to the private sector, we are back to a sense of stability...,” he told Kwami Sefa Kayi.
The Banking Storm
Last year was a very torrid time for the banking sector. The regulator, Bank of Ghana (BoG), set a December 2018 deadline for all banks to beef-up their minimum capital by as much as 70 percent (from GH¢120 million to GH¢400million).
The rationale behind this, the BoG said, was to boost banks’ capacity so as to enable them to support the country’s economy as they should.
Before the deadline expired, precisely in August 2018, five local banks—Unibank, Beige Bank, The Royal Bank, Construction and Sovereign— were declared insolvent, collapsed and merged into the Consolidated Bank Ghana Ltd. (CBG). That move alone cost the taxpayer some GH¢10.2billion.
This didn’t only cost government money but also inspired fear among depositors. The industry was hit with a massive panic withdrawal-like never before.