The Bank of Ghana (BoG) has set up a special office to identify officials whose actions contributed to the collapse of seven indigenous banks.

The central bank says personnel found culpable will be dealt with in accordance with its Human Resource policies and further face the full rigours of the law.

The bank in a statement released on Wednesday said it is undertaking reforms that will overhaul its Supervisory Unit and strengthen the banking sector.

According to the statement, the newly established Office of Ethics and Internal Investigations is also aimed at strengthening good governance within the Bank and promote the highest standards of ethical conduct commensurate with its mandate.

Details of statement

The central bank revealed in the statement that it commissioned in August 2017, an independent investigation into the circumstances that led to the collapse of UT Bank and Capital Bank.

The investigation, according to the regulator of the banking sector, was conducted by Boulders Advisors Limited whose report cited various instances of supervisory weaknesses, regulatory breaches, corporate governance failures, insider dealings, and accounting and financial improprieties, among others.

The Bank of Ghana said it has commissioned similar investigations into the affairs of the five failed banks whose licences were recently revoked. 

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Parliamentary investigation

It emerged on Wednesday that the Finance Committee of Parliament is set to open a full probe into the circumstances leading to the collapse of the seven indigenous banks.

Ranking Member on the committee, Cassiel Ato Forson, revealed this to Joy News, adding that the modalities of the probe will be made available to the public in due time.

He explained that the committee might probe key persons involved in the banking sector fiasco in-camera.

“We are yet to decide whether we will go public or not but what we can confirm is that we have decided to investigate,” Mr Forson told Joy News’ Joseph Opoku Gakpo.

Background

The Bank of Ghana about two weeks ago revoked the licenses of five universal banks, namely, Royal Bank, Construction Bank, Sovereign Bank, Unibank and BEIGE Bank.

According to the central bank, the action was taken due to the inability of some of the banks to meet existing minimum capital requirement.

Some of the troubled banks also faced liquidity issues while others obtained their licences through dubious means.

In 2017, the licences of UT Bank and Capital Bank were revoked over similar liquidity issues. It has emerged in a BoG commissioned report that liquidity support funds advanced to the two banks were also misapplied.