Workers of 5 defunct banks put on probation despite BoG’s no job loss assurance

The employment status of workers in the recently collapsed banks by the Bank of Ghana is in limbo as all workers have been put on probation.

This move by the Managing Director of the of 5 collapsed banks, now Consolidated Bank Ghana is contrary to the Bank of Ghana’s assurance that worker from the 5 defunct banks will not lose their jobs.

In letters dated August 1 and signed by the new Managing Director for CBG Limited, Daniel Addo, the workers were informed that the period will be used to access their employment status to determine whether anyone remains an employee of the new bank.

“The purpose of this letter is to inform you that you will be working with the new bank for a period of 60days during which time it will be possible for your employment status to be assessed.

Based on the assessment, a determination will be made as to whether you will continue to be in employment with the Consolidated Bank Ghana Limited. Kindly be reminded that you will still operate from your current work place.”

Although it is unclear how many people the bank intends to retain after the probation period, many are expected to be sent home; adding to the high level of unemployment currently plaguing the country.

Background

The Bank of Ghana (BoG) on Wednesday August 1 revoked the licenses of five banks and merged them into a single entity.

The move forms part of its efforts to address legacy problems in the banking sector and to restore the stability and resilience of the financial system.

The collapsed banks, according to the Governor of BoG, Mr. Ernest Addison, are having liquidity challenges and “efforts to keep their heads above water have yielded no fruitful results, hence the reason they have been consolidated.”

The BoG also said its investigations have revealed that; The Beige Bank, Sovereign Bank and Construction Bank obtained their banking licenses illegally through the use of suspicious and non-existent capital.

Shareholders and directors of uniBank however are said to have advanced GH¢5.3 billion in loans from the bank through illegal means.

Aftermath

Following the news, some financial analysts have insisted that the malpractices and illegalities at the banking supervision department of the Bank of Ghana could have been avoided if BoG had done due diligence in that area.

Some also argue that to inhibit others from replicating such practices, the Central Bank must arrest and prosecute its officials at the banking supervision department, as well as owners of the banks found culpable for the illegality.

Meanwhile, BoG has appointed Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.