Banks collapse only deliberate attempt to dupe state – Ato Forson alleges

Banks collapse only deliberate attempt to dupe state – Ato Forson alleges
Source: Ghana| Felix Anim-Appau | Adom News
Date: 13-08-2018 Time: 05:08:32:pm
Cassiel Ato Forson

A ranking member of Parliament's Select Committee on Finance has attributed the recent bank closures to some greedy individuals who are bent on duping the state.

Cassiel Ato Forson said the collapses are due to the recklessness of certain individuals whose acts need not go unpunished. 

“Last year, I raised a big issue of these collapsed banks asking government to ensure transparency prevails but I was ignored, even after I had written a letter to the Finance Minister to explain,” he told Adom News’ Felix Anim-Appau.

The minority spokesperson on finance added that “when Parliament resumes we will recall the Finance Minister to come and explain why he used Ghana’s money of about ¢8 billion to settle the recklessness of management of the banks.

Seven local banks have been dissolved by the Bank of Ghana (BoG) for various reasons including insolvency.

The collapse of the seven indigenous banks came at a great cost to the state, with a projected cost of ¢5.76 billion to the taxpayer.  Already, government is saddled with a ¢2.2 billion given to settle the liabilities of UT and Capital Banks.

When the central bank governor, Dr Ernest Addison, announced the closure of Sovereign, Construction, Unibank, Beige and Royal Banks, he revealed that ¢5.76 billion bond had been issued in support of the newly created Consolidated Bank Ghana Limited. 

Governor of the Bank of Ghana, Dr Ernest Addison

This does not impress Cassiel Ato Forson who said the legislature which was supposed to approve the ¢8 billion to revivify these banks had no knowledge of what was going on.

“Parliament of Ghana has not approved any amount that was used in the form of a bond for these banks”.

He said his call on government to explain the money involved in the whole brouhaha was ignored when the whole incidence began.

According to Ato Forson, when it is established that the Finance Ministry flouted the laws, Parliament will deal with them.  

Ejumako-Enyan-Essiam MP also analysed the developmental impact the said amount could have on Ghana’s economy stressing it could construct a motorway from Accra to Kumasi and extend it through to Takoradi.

Meanwhile, a senior lecturer at the Department of Economics at the Kwame Nkrumah University of Science and Technology (KNUST), Dr Grace Ofori Abebrese lauded government for the decision it took to close down the struggling banks.

She argues that the decision was taken to protect the confidence people have in the banking sector.

According to her, the decline of the bank’s roles following their collapse would have affected the economy badly and that necessitated the intervention of government to invest that sum to revive the banks.

"Government thought it economically wise to undertake that risk even though the banks still collapsed despite the amount invested,” she said.

 

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