A lecturer with the University of Ghana Business School has applauded the Ernest Addison led Bank of Ghana for instilling good corporate governance in the banking sector.

While he would not say the Central Bank has been perfect thus far, Prof Godfred Bokpin said the diligence, confidence and holistic approach the Central Bank has adopted so far is quite encouraging.

His commendation comes minutes after the Governor of the Bank of Ghana announced the collapse of Beige Capital, Sovereign Bank, Unibank, Royal Bank and Construction Bank over liquidation challenges.

 The five have since been unified under a Consolidated Bank with the government providing an amount of ¢450 million as capital.

Ernest Addison named Mr Daniel Addo as the new head of the Consolidated Bank with five different Directors to take temporary charge over the five banks at least during the period of transition.

The five banks are said to have indulged in some poor banking practices, some of them criminal.

Sovereign Bank obtained their license under false pretence, an act that could attract criminal charges.

The bank, he said, is insolvent.

He also said Beige and Construction Bank used the fictitious and non-existent capital to obtain licenses. The banks, therefore, obtained licenses under false pretenses.

Unibank had disbursed over $3billion unapproved loans to customers and shareholders leaving the bank exposed.

It is not clear yet what action the Central Bank intends to take against the Directors of the Banks involved.

Speaking to Joy News’ Evans Mensah the University of Ghana Business School lecturer said there is no need for panic over the takeovers.

Prof Godfred Bokpin said the decision by the Central Bank to preserve jobs rather than just allow the banks to go under is a welcome development.

He was however unhappy with the piecemeal announcement of the collapse of banks, hoping this will be the last of such announcements.

So far seven banks have been affected and taken over with 27 banks still in existence.

Last year the Bank of Ghana announced the takeover of UT and Capital Banks and handed the assets of the two companies to the Ghana Commercial Bank.

Prof Bokpin said actions and inactions of players at the various banks, including the Central bank over the period led to the sad state of affairs.

“We don’t need to find ourselves in this again,” he said.