‘We’re building a resilient financial system’ – BoG touts tough reforms

Months after sweeping reforms and crackdowns on the troubled banking sector, the Bank of Ghana (BoG) is confident that indicators will soon point to stronger banks.

Speaking at the Joy Business Financial Services Forum on the theme ‘The Changing Tide of Ghana’s Financial Services Sector: The Cause, the Cost, and the Clean-up’, Deputy Governor of the BoG, Elsie Awadzie, revealed Thursday that the regulator is still monitoring the sector to ensure that banks meet the minimum capitalisation requirement by the end of the year.

Photo: The Forum was attended by stakeholders in the banking industry.

“One had to take very difficult decisions,” the Deputy BoG Governor explained as one of the reasons the BoG shut down banks that breached regulations.

The troubles in the sector begun with the collapse of Capital Bank and UT Bank in August 2017.

The two banks were subsequently absorbed by the state-owned GCB Bank.

Although the central bank assured that there would be minimal job losses, scores of the staff of Capital bank and UT bank were asked to go home and never return.

A year later, they took sweeping measures that shook the industry: it took over five more banks and created the Consolidated Bank Ghana to take over their assets and liabilities.

Read more here: BoG creates Consolidated Bank to take over 5 struggling banks

Speaking at the Forum, Awadzie said, “do nothing was out of the question. Do something also had many ramifications. And in our financial system, what we try to do is to ring-fence the problems we have found in the recent past, deal with them in as decisive a manner as possible and ensure that as bad as the situation was, it didn’t spread throughout the entire system because it could have spread and it would have been very bad.”

“So what we did was to quickly address and contain the problem, manage it, resolve it and with the intervention of the Ministry of Finance as well, bring in the much-needed resources so that depositors whose deposits had been at risk were made whole.”

“This was really part of a package to ensure that while dealing with the package, we were dealing with the problem we were also mitigating the painful effect of the problem for the entire public.”

She wants all stakeholders to join the regulator in building a strong banking sector.

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