Banking Consultant and former Managing Director of Bank of Africa, Menson Torkornoo is blaming the government for the poor approach adopted in cleaning –up the financial sector.

According to him, the best method was to consolidate two or three distressed banks and appoint administrators to run these banks for a while, than putting all into one institution, bearing in mind the job losses.

Speaking to Joy Business on the 5.0% tax on profit before tax of banks, Mr. Torkonoo said “So when government went in, collapsed the institutions and then had to pay back all the depositors, it was good but now government is asking you and I to pay back that money because it is not only the banks that are going to do it-- the banks are going to throw that money back to you and I in terms of charges”.

“Personally, the intentions were good but then the act was very wrong. And now they want to levy you and I to pay back that. It is going to be a very serious strain on banks because banks have not recovered yet”, he explained.

“It’s a very funny imposition on banks because some of us [banking experts] were of the opinion that as much as government want to clean-up the financial sector, the approach that it took was very bad- I personally feel it was very bad. When people invest in institutions of financial sector, and there is a problem, I would have thought that government will asked Bank of Ghana to consolidate some of these ailing institutions and find proper people to take over the management”, he continued.

"Government can even take shares in the company, appoint people to run it up to a certain point and when they recover, government gets out and then sells it to the public", he further said.

“We will be surprised if banks can go back to the profits made in 2018 and 2019. Covid-19 has reduced the efforts of so many of these banks and they can never be the same again, to get those profits. For me it is not a very good task”, he pointed out

He is unhappy that government is using the backdoor to recoup losses the sector created, instead of using a better approach in reducing losses and saving many jobs.

“Government is taking monies through the back door and is going to affect you and me. I don’t think any bank at all would be happy about the 5.0% tax on profit before tax.”

He charged the authorities to deal with the perpetrators of the banking sector collapse, saying, everyone found guilty must be dealt with by the law.

“Also, the owners [collapsed banks], some of them who were culpable in taking loans from the very institutions they owned and couldn’t pay back, resulting in the collapse of these institutions - they should be labeled and monies recovered because most of them have money, they have assets”.

BoG revoked licenses of 9 banks whilst six merged into 3 banks

The Bank of Ghana revoked the class 1 banking licenses of nine banks during the financial sector clean up.

They included UT Bank, Capital Bank, Sovereign Bank, Beige Bank, Premium Bank, The Royal Bank, Heritage Bank, Construction Bank and UniBank.

Six Banks were merged into three banks. They were First Atlantic Merchant Bank Limited and Energy Commercial Bank, OmniBank Ghana Limited and Bank Sahel Sahara Ghana as well as First National Bank and GHL Bank Limited.

Meanwhile, receivers of the nine collapsed banks have been able to recover a little above GH¢700 million as at the end of 2019.

This is out of the GH¢10.1 billion funds that were advanced to the customers of those banks.