Financial Analyst, Joe Jackson
Financial Analyst, Joe Jackson, has questioned how former president John Dramani Mahama will restore the operating licenses of banks which were collapsed under the clean-up exercise conducted by the Bank of Ghana.
The former president delivering his acceptance speech after being elected as flagbearer of the National Democratic Congress ahead of 2024 polls said the banking licenses that were unjustly cancelled by the governing New Patriotic Party will be restored if given the nod.
Reacting to the comment, Joe Jackson believes that the decision will somewhat be difficult due to the wave of challenges in the financial sector at the time which called for the Central Bank’s intervention to safeguard depositor’s funds.
He added that the decision by the Bank of Ghana remains justified despite some disagreement with the process at which some banks became insolvent.
“You have got to be clear that there were a lot of challenges in the financial sector, huge challenges, some of the institutions were in deep trouble such that there is arguably a legitimate reason for the central banks stepping in. You may disagree with the process but you cannot disagree with the premise that these institutions were in trouble,” he is quoted by 3news.com to have said.
Joe Jackson continued that, “The caveat is they were unjustifiably shut down. First of all, we have to wait and see who can claim legitimately that they unjustifiably shut down but the bigger problem is this, it is going to be some seven or eight years after the event, even if you win, how are you going to entangle this?"
“At best, maybe you will compensate the owners and the shareholders,”
As part of its efforts to clean-up the banking sector, the Bank of Ghana examined the affairs of a number of banks and discovered a number of anomalies relating to its licensing, the sources of its capital, and related party transactions.
Upon its determination, some nine local banks, 23 savings and loans companies, 347 microfinance institutions, 39 finance houses and 53 fund management companies were collapsed during the exercise.
The central bank also determined that pursuant to sections 9 and 12 of Act 930, the majority shareholder of some banks did not meet the “fit and proper person” test.
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