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The Bank of Ghana (BoG) has said the public and other stakeholders in the banking sector ought to appreciate the central bank for saving thousands of jobs in the banking sector through its interventions in the past one year, since, according to the Governor, a lot more jobs would have been lost had the regulator sat aloof and watched unconcerned, since the seven affected banks, in Dr Ernest Addison’s estimation, would have collapsed anyway.
The Bank of Ghana recently fused uniBank together with Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank to form the Consolidated Bank Ghana Limited (CBG).
The management of the Consolidated Bank Ghana Limited (CBG) is to lay off an estimated 1,700 workers.
Out of the number, 700 are mobile bankers of the now-defunct The Beige Bank, while 1,000 were former employees of The Royal Bank, The Construction Bank, uniBank and Sovereign Bank.
The fusion of the five banks followed the takeover of two other local banks: UT Bank and Capital Bank by GCB Bank in August 2017 with the blessing of the regulator after it emerged that they were in dire straits.
In total, seven local banks have gone under, as the Bank of Ghana’s 31 December 2018 deadline for all universal banks to recapitalise from the GHS120 million to GHS400 million draws closer.
Responding to questions about the huge number of jobs lost in the sector as a result of the central bank’s actions, Dr Addison told journalists at a press conference on Tuesday, 25 September 2018 that the job losses would have been in excess of 4,000 if the BoG had not intervened.
“All of the jobs in that sector were at risk…about 4,000. These were banks that were heading towards collapse, what would have happened if the Bank of Ghana had not intervened? All of those jobs would have been lost anyway, so, we came in to save those financial institutions from imminent disaster. I think this is the way you should look at it,” he said.
For him, the “Bank of Ghana’s action in coming in to take care of banks that were heading towards collapse was to save jobs, was to protect depositors and you have to interpret it that way to understand the public good aspect of the decision that was taken because we came in there to save the situation and that situation saved jobs”.
He emphasised that: “Banks have to be properly managed and well capitalised, banks must have good corporate governance”.
Dr Addison said the central bank will, therefore, pursue its mandate in ensuring that banks adopt best practices to safeguard the economy.
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