BoG's 'lack of foresight' collapsing financial market – NDC MP fumes

BoG's 'lack of foresight' collapsing financial market – NDC MP fumes
Source: Ghana | | Austin Brakopowers | | Instagram: @realbrakopowers
Date: 18-08-2017 Time: 07:08:39:pm
Bolga Central MP, Isaac Adongo

A Member of Parliament’s Finance Committee has blamed the Central Bank for the collapse of two indigenous banks, UT and Capital Banks.

Isaac Adongo said the two banks could have been saved from going bust if Bank of Ghana had been effective in the discharge of its work.

Speaking to Emefa Apawu on Joy FM’s Top Story Friday, the lawmaker said there are visible issues affecting the banking sector but the Central Bank is not proactive to addressing them.

"There are very serious questions to do with the vulnerability of our banking system and financial market and bank of ghana is not demonstrating the foresight to deal with that," he said forcefully.

The walls of the banking sector shook Monday, after two leading indigenous banks, UT and Capital Banks were bought by GCB Bank.

Bank of Ghana, the banking regulator, approved the transaction, saying the two banks are financially distressed to exist as autonomous institutions.

The two banks have a network strength of 53 branches, with over 900 employees across the country.

The accounts of all directors and senior management members of the two banks have been frozen to aid with investigations into the collapse, the Central Bank has said.

Although he lauded Bank of Ghana for the swift manner it handled the sale of the two banks, Mr Adongo said the situation was avoidable if the right thing has been done in the beginning.

He said there are many unanswered questions regarding the sale of UT and Capital Banks to the largest indigenous bank, GCB Bank.

“What is the extent of impairment of the two banks? What is the level of assets taken over by GCB Bank?” he asked, adding there are many banks that do not have a working board but no action has been taken on it.

Mr Adongo said GCB Bank, Universal Merchant Bank and ADB Bank do not have boards, yet they have been allowed to transact business without proper approval as required by the law.

This situation, the lawmaker said will affect the banking sector if Bank of Ghana does not agitate for the formation of the various boards.

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