The Member of Parliament (MP) for Bolgatanga Central, Isaac Adongo has admonished the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, to draw a strategic plan to save the banking sector from collapse.
“He should come out and announce a programme to save our banks”, Mr Adongo noted in a recent video.
The government of Ghana, since August 2017, has rescued seven struggling local banks with billions of taxpayers’ money.
They include UT Bank, Capital Bank, uniBank, Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank.
The first two went under in August 2017.
The other five went bust two weeks shy of a year after the first two failed.
UT Bank and Capital Bank were taken over by GCB Bank while the last five were put together by the Bank of Ghana to form the all-new CBG.
The BoG has increased the minimum capital requirement for commercial banks to GHS 400 million from GHS120 million.
The banks have until the end of 2018 to meet the requirement.
Some of the local banks are making frantic efforts to merge, while others have floated shares to raise enough capital to meet the minimum requirement.
Mr Adongo, who insists the banking sector must be revamped to preserve local banks, said the proposed plan to restructure the financial sector by the BoG should be in two parts.
Firstly, he wants the central bank to “announce an extension for those banks that genuinely have programmes that can lead to realisation of the [new] minimum capital”.
Additionally, he wants the apex bank to “take off those new banks that are already well-capitalised and extend their tenure”.
Together with the Ministry of Finance, Mr Adongo wants the BoG to “set up a dedicated stimulus package under the financial investment trust, roll out a clear policy to encourage the existing banks that are not meeting [the minimum capital requirement] to merge, and give them a timeframe of between six months to one year to tap into that fund in order to merge to become stronger banks”.
