15 BoG staff hot over collapsed banks

kwahuonlineradio February 12, 2019 0

At least 15 staff of the Bank of Ghana are before a Disciplinary
Committee over misconduct leading to the collapse of over seven banks in
Ghana.

The newly formed Ethics and Investigative Office of the Central Bank
referred the 15 officials to the committee after investigating their
alleged role in licensing and supervising the defunct banks.

The Office was set up in August last year to investigate allegations of
misconduct by staff including any role in respect of the collapse of
the defunct banks.

Top BoG officials have revealed “staff found culpable will be dealt
with” in accordance with the Human Resource policies, and referred to
law enforcement agencies.

The Finance Minister, Ken Ofori Atta, revealed in the 2019 budget
statement that the collapse of seven banks – unibank, Beige Bank,
Sovereign Bank, Construction Bank, Royal Bank, Capital Bank, UT Bank –
has cost the government an amount of GH¢9.9 billion.

According to him, through government’s intervention in August this
year, deposits of some GH¢11.0 billion have been saved as well as some
2,661 jobs in addition to several hundred saved in 2017 from the
insolvent 2 banks that were closed in 2017.

“Mr. Speaker, since the assumption of office by the current
administration of the Bank of Ghana, bold measures have been taken to
restore the health and resilience of the banking sector and to clamp
down on unlicensed deposit-taking financial houses. In addition to the
two insolvent banks that were closed last year by the Bank of Ghana,
five more were closed in August this year for insolvency and other
infractions of the law.

“Rescuing the situation regarding these seven banks has, so far, cost
some GH¢9.9 billion in monies that Government had not budgeted for and
could have surely been put in good use to fix our numerous
infrastructural needs, such as housing, roads, bridges, etc.

“The Government has continued to provide assurances to depositors and
customers of licensed banks and specialised deposit-taking institutions,
through demonstrable actions, that their deposits are safe. Indeed,
following the creation of the Consolidated Bank Ghana Limited (a wholly
owned Government of Ghana and licensed by the Bank of Ghana as a
universal bank), the government capitalised it with GH¢450 million. In
addition, Government had to issue a bond with a face value of

“GH¢7.6 billion to cover the gap, between the deposit liabilities and
the remaining good assets of the failed banks. This singular action of
government has reposed confidence in the banking system because it will
ensure that no deposit will be lost, and customers will continue to
access their deposits without difficulty.

“Through Government’s intervention in August this year, deposits of
some GH¢11.0 billion have been saved as well as some 2,661 jobs in
addition to several hundred saved in 2017 from the insolvent 2 banks
that were closed in 2017. The Government’s action has also created a
strong indigenous Ghanaian bank in place of the five failed banks.”



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