'Banking sector clean-up was harsh, you don’t do that on a fragile economy' – Dr. Sam Ankrah

Independent Presidential hopeful, Dr. Sam Ankrah has described the banking sector clean-up undertaken by the Bank of Ghana in 2017 as ‘harsh’.

He argues that the decision by the Bank of Ghana gravely impacted on the livelihoods of traders, small businesses and others who critically relied on some of these banks for financial support and lending.

Speaking on GhanaWeb TV’s Lowdown with host Daniel Oduro, the investment banker noted that the moment the Central Bank flagged compliance issues and irregularities with some of the banks, it should have resorted to creating a clear distinction between the business side and criminal aspect of the infractions.

“I think to be honest; the banking sector clean-up was very very harsh; you don’t do that on a fragile economy like ours [Ghana] where employment is very difficult to come by…there’s a huge informal sector of small businesses that require the services of these banks and I think attacking and closing them for whatever reason from my professional point of view is wrong,” he opined.

Dr Ankrak continued that,”…This is not the first time such things have happened in any part of the world even as America had gone through a similar experience but they tend to save the banks by tiering them. Traders in Ghana could walk into some of these banks to access loans and the clean-up impacted on severely on their livelihoods”

He reiterated that the BoG should have dealt with the criminal aspect of the irregularities and compliance issues while allowing the banks continue to function as banking plays a key role in the growth of developing countries like Ghana.

In 2017, the BoG undertook a clean-up exercise that saw the revocation of operating licenses of some eight banks, 23 savings and loans companies and more than 400 specialised deposit-taking institutions (SDIs).

According to the Receiver for some of the financial institutions, preliminary investigations found that most directors of the defunct financial institutions failed in their fiduciary responsibilities to customers and other stakeholders.

The measures, according to the BoG safeguarded the investments of some 4.6 million depositors.

Watch Dr. Sam Ankrah's submission from minutes 9:40 below

MA/NOQ

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