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xxxxxxxxxxx of Wednesday, 15 August 2018

Source: citibusinessnews.com

Ofori-Atta hints of action against those behind banks’ collapse

Finance Minister, Ken Ofori-Atta, has said government will ensure persons responsible for the collapse of some local banks in the country will be made to face the law.

He believes the collapse of these banks was not a failure on the part of the banks, but individuals who stole depositors’ funds for their personal use.

Speaking at a press conference to inaugurate the Tax Dialogue Initiative on Tuesday, Mr. Ofori-Atta maintained that those found culpable will be made to answer for their roles.

“I think as a nation, we are really soft about enforcement of laws and hopefully what we are going to do in the banking sector, everybody will begin to realize that those periods are gone, and if I am going to have to spend 5.6 billion to bail out the banking system because I have to protect depositors, the question is not one of a banking failure.”

“I need to be able to tell you that that managing director or that shareholder stole that money and it has to be very upfront because that’s 5 billion that I’m using as opposed to School Feeding, maternal issues, and the issue of sentiments are out of it. It is not a bank failure. It is individuals who have done something to bring us to this compromising position and I think it is that same sense of social justice that we should bring to bear in the tax administration system.”

The Governor of the Bank of Ghana, Dr. Ernest Addison, recently revoked the licenses of five banks; Sovereign bank, Beige Bank, Construction Bank, Royal Bank and uniBank.

This was after UT and Capital Banks, which collapsed first, were taken over by GCB on the instructions of the Bank of Ghana.

The Governor, Dr. Ernest Addison, said some of the five newly collapsed banks had committed various offences against the country’s banking laws including obtaining their licenses through false pretences.

The governor said the five had therefore been collapsed into a new bank; the Consolidated Bank of Ghana and deposits of the collapsed banks had been transferred to the Consolidated Bank.

The banks collapsed despite the fact that the Bank of Ghana had supported them with hundreds of millions of cedis to enable them to recover from distress.

Their collapse has however resulted in the state incurring more cost in fixing the mess created.

This has increased public agitation as some of those said to be complicit in the mismanagement of the banks misapplied the funds leading to the eventual collapse.