Punish BoG Staff Who Supervised Mess – NERA

Dr. Ernest Addison Governor BoG

NEW
ERA Africa, a non-governmental organisation, has stated that it will be fair on
the part of the Bank of Ghana (BoG) to let the public know what punitive
measures it has instituted against its staff who through connivance or
negligence supervised the recent mess in Ghana’s financial sector.

“The
public is waiting in angst to see what will actually happen to the staff of BoG
who through whether connivance or negligence supervised this grandiose mess. It
must be stated that whatever the internal arrangements the BoG seeks to comply
with, it is only fair for the citizenry to know what punitive actions will be
taken by the bank to deter current and future staff.”

A
statement issued by NERA in Accra jointly signed by Yaw Baafi Ayimadu, Emmanuel
K. Zewu, Bernard Owusu-Mensa and Hardi Yakubu, which made this known, said the
Receiver, must as a matter of urgency, do well to make timeous payouts to
affected depositors because some depositors that were affected after the
revocation of some microfinance institutions have still not been paid.

Also,
it said there must be a fast-tracked process to get the depositors insurance
scheme on board.

“From
the current event, it is apparent that to ensure financial inclusion,
blockchain technology and fintech will play a major role. The BoG is encouraged
to set modalities for innovators to brainstorm the possible products to roll
out in the market for this objective. The crisis cannot be discussed in a
vacuum. Despite the lapses in corporate governance, it is also a fact that the
general economic atmosphere makes banking difficult in Ghana. The necessary
infrastructure that supports sound banking practices (except the laws) is
woefully inadequate. The government must therefore fast track processes that
will help banks in mitigating the losses from loan defaulters,” it added.

Suspicion

NERA,
however, revealed it was suspicious. “It is our considered view that the
piecemeal approach the BoG used in sanitizing this critical sector did more
harm to innocent businesses including hitherto stable financial institutions.
The piecemeal approach, among others, resulted in bank runs and fire sales that
led to further deterioration of balance sheets of some companies,” it added.

It
continued that the top-down approach the BoG used in the sanitization process
made the exercise problematic. “There was a clear sense of panic among
depositors when some commercial banks were liquidated. For example, there was
no way uniCredit was going to survive when Unibank collapsed. After collapsing
these banks, many nonfinancial institutions that were later collapsed had
banking relationship with the defunct banks and had difficulties accessing
their locked up cash.”

Also,
it noted that it was very worrying that after the BoG released the various
statements particularly for the revocation of the five banks and the 23 savings
and loans, there were counter statements ostensibly pointing out falsities in
the BoG’s communique. “This gives a worrying sign but it will not be in our
ambit to pass verdict. Once some aspects of the revocations are with a
tribunal, we would await the verdict of this legally constituted body.”

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