Under-bed, under-pillow savings far outstrip bank savings – PEF CEO

The Chief Executive Officer of the Private Enterprise Foundation (PEF), Nana Osei Bonsu, has said public confidence in the banking sector has plummeted to the extent that under-bed and under-pillow savings have surpassed bank savings.

According to him, the conduct of the directors and managers of the nine collapsed local banks as well as the auditors who gave them a clean bill of health and award organisers who gave them awards for their apparent stellar performance, should be arrested and prosecuted because they have all contributed to the dampening of the public confidence in the financial sector.

Mr Osei Bonsu told the Ghana Yensom show on Accra100.5FM hosted by Kwabena Prah Jnr (The Don) on Monday, 24 June 2019 that “as a result of the dip in confidence in the banking sector, so many people have resorted to saving their money under their beds and pillows rather than taking them to the banks”, a situation that he warned poses a serious threat to the banking sector.

The PEF CEO advised the authorities to find ways of boosting public confidence in the banking sector.

When the Bank of Ghana started its cleanup exercise of the banking sector in August 2017, nine local banks went under. While some of them were accused of using suspicious means and capital to set themselves up, others were also found to have been mismanaged by their shareholders.

The affected banks include Heritage Bank, Premium Bank, former Finance Minister Dr Kwabena Duffour’s uniBank, The Beige Bank, Sovereign Bank, The Construction Bank, The Royal Bank, Mr Prince Kofi Amoabeng’s UT Bank, and Capital Bank, which was chaired by Pastor Mensa Otabil.

While UT Bank and Capital Bank were swallowed by the state-owned GCB Bank with the blessing of the Dr Ernest Addison-led central bank, the seven others were subsumed by an all-new state-owned bank, Consolidated Bank Ghana Limited (CBG), which was created by the Bank of Ghana during the cleanup.

After cleaning up the banking sector, the regulator turned its focus on the microfinance and microcredit sector. The licences of 386 of them were revoked.

The BoG’s next stop is the rural and community banks.

In the view of Mr Osei Bonsu, “The auditors who looked into the books of these banks and gave them a clean bill of health must also be arrested”.

“Those who also organised awards schemes and said these banks were also the best should also be arrested and questioned”, he added.