Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has attributed the local banks that failed during the recapitalisation exercise undertaken during the Akufo-Addo administration to issues relating to risk management frameworks.
To that end, he said the current leadership at the central bank has been emphasising risk management frameworks for the banks. The Banking Supervision Division of the BoG has issued a number of directives to the local banks in that regard, he said.
Dr Asiama said this while answering questions during the 132nd Monetary Policy Committee (MPC) press conference in Accra on Thursday, September 4.
“You have to look at the reasons that were given by the BoG when those banks were resolved; a lot of them had to do with the risk management framework that they and that is why we are currently emphasizing the risk management framework of banks.
“The Banking Supervision Department has issued a number of guidelines already. Yes, we need to do something to ensure that our local banks or indigenous banks are able to thrive and compete.
“The current regime, where over 60 per cent of the total bank assets accrue to foreign-owned banks, from a strategic point of view, may not be very optimal, and so going forward we will want to see our local banks increase their participation in the sector,” he said.
In 2018, some local banks collapsed when the central bank revised the minimum paid-up capital for existing banks and new entrants from GHS120 million to GHS400 million.
According to the regulator, this was to test the viability of the banks. The banks that were unable to meet this new requirement were either merged or collapsed.
Some nine local banks, 23 savings & loans companies, 347 microfinance institutions, 39 finance houses and 53 fund management companies closed down during the exercise.
UniBank, The Sovereign Bank, The Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank, UT Bank, and Capital Bank all collapsed.
Some analysts and observers criticised the Bank of Ghana (BoG) and the Finance Ministry over the collapse of the banks because, in their view, these banks could have been saved to continue employing Ghanaians.
