Banking halls look beautiful because of Trust. To operate a restored bank may be a pursuit of failure and an attempt to experiment with depositors’ funds. This is because banking thrives on trust.

The trust was broken in 2019 when the banking licenses were revoked. The revocation, whether justified or not broke the very foundation on which the bank can ever be potent. It broke the lining on which every financial ecosystem runs – trust.

In fact, a generation has not yet passed since the revocation of banking licenses.

Customers can clearly remember when they walked into the banking halls and were unable to withdraw their business capital and hard savings. Those nightmares linger.

On the basis of violated trust, I posit that it will be extremely difficult for any bank whose license was revoked and restored to survive. It is likely to fail if it ever operates, especially under its old name.

It is important to note that the banks and savings and loans firms had huge challenges before the revocation of their licenses. Let's not be deceived that it was fine with all of the banks and the Bank of Ghana just revoked the operating licenses.

It is not the case that they were high-performing institutions before their licenses were revoked. Many of them were struggling. Some were being mal-managed. They had Capital Adequacy ratios in negatives. Some had over 80% of their loan portfolio extended to affiliate or 'sister' group companies. The management actions they took also affirmed the challenges.

For instance, one had suspended operations in 79 of its branches, including the Head office branch, and temporarily suspended its entire management team without the approval of the Bank of Ghana contrary to section 25 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), mainly as a result of its insolvency and liquidity challenges. It gave huge sums of loans to government contractors and it failed to pay.

Why will any competent lender grant high volumes of loans in respect of Government of Ghana contracts when you ought to be aware of the liquidity challenges such loans pose to banks and other lenders. You do not do that and tell the government to pay you so that you can survive. No one forced you to grant loans to that sector.

If the management of that bank were up to task, it would have known that granting loans to the government is risky and have been so before I was born. The risk is founded in delay in payment that affects liquidity. Therefore, if you venture into same, you must ensure that the SKIN OF GOVERNMENT was in the game. Why should a bank be trusted with the same when customers trust it again with deposits?

In furtherance, the Bank of Ghana investigation conducted at one of the banks revealed that a significant amount of depositors’ funds held with some of the banks had been transferred to outside affiliates (another company owned by the bank) without any documentation to support such transfers in breach of section 19 of the Foreign Exchange Act 2006, Act 723, Section IV of Bank of Ghana Notice No. BG/GOV/SEC/2007/4, and subsequent Bank of Ghana Notices issued in August 2014, prohibiting such practices.

The 'sins' of some of the banks as enumerated by the Bank of Ghana were numerous. But even if these 'sins' were cleansed by the court(s) or were wrongly labelled by the regulator, a bank should know that what it require to be credible and operate (which is TRUST) has been hugely obliterated.

I have not seen this before. A bank's license revoked and reinstated, and that bank was able to build confidence in potential clients to do business again. I am of the opinion that the collapsed banks ought not to have been collapsed. Management and shareholder takeover were formidable alternatives.

Banking, and money matters are not areas that tolerate populism. The shareholders of these collapsed banks should clear themselves if they have not done anything wrong. But let the collapsed brand rest.

UniCredit Savings and Loans, arguably the best Savings and Loans firm by then was unjustifiably collapsed. But the brand is resting.

Let the brand rest. The trust has been broken already.

Shalom!