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Business News of Thursday, 23 August 2018

Source: citibusinessnews.com

‘Excess’ staff of Consolidated Bank to get alternative jobs

Deputy Finance Minister, Charles Adu Boahen has disclosed of an ambitious plan by the government to address issues of redundancy with the consolidation of five local banks.

He explains that the government is working to reduce the number of workers who may be laid off for one reason or another when the processes of consolidation are completed.

Mr. Adu Boahen made the comment at a public dialogue on the banking sector crisis organised by the Danquah Institute in partnership with Citi FM on Wednesday, August 22, 2018.

According to him, the government is considering developing alternative jobs which will absorb some of the staff of the five banks who will be eventually laid off.

“We could get some of the staff to set up a car rental company then we hive them off to run this company; lease the cars back to this back and we rent the cars. We can do same with security and catering services… before you realise, you have set up maybe five or six indigenous Ghanaian own businesses of people who are providing services to the bank and we save some jobs,” he noted.

The Bank of Ghana on August 1, 2018, revoked the licenses of five local banks.

The central bank cited issues of poor corporate governance, weak capital, severe impairments of loans, high insolvency, among others as the basis for the action.

The banks that were affected were; Unibank, the Royal Bank, Construction Bank, Sovereign Bank and the Beige bank.

Already, the management of the Consolidated bank has issued a directive indicating that the staff of all the collapsed banks currently with the new bank have till the next sixty days (ending September 2018), to undergo an assessment of their skills.

This means that the affected workers are currently considered on probation until the expiration of the two-month period to determine their continuous stay or exit from the Consolidated Bank.



Weak deposit mobilization collapsed banks

Meanwhile, Mr. Adu Boahen has mounted a strong defense for the cleansing of the banking sector by the regulator.

He argues that the decision to operate a Treasury Single Account (TSA) has exposed the failure of most of the struggling banks in mobilizing deposits to sustain their operations.

“What we have done is to bring all the government deposits into one account and these are key deposits that anchored a lot of these institutions that are reeling today; but that is because they were not doing proper banking by going out to take deposits.”

He added, “As of May 2017, we had at least 10 million accounts comprising savings and cheque-in; if it is assumed that every person has two accounts that means there are about five million unique accounts.”