More than one year after the collapse of some domestic banks in the country, less than 10 percent of the total amount expected to be realised from loan defaulters and sale of the banks’ assets has been retrieved so far, Governor of the Bank of Ghana, Dr. Ernest Addison, has disclosed.
Speaking at the 17th Working Luncheon of the Ghana Association of Bankers, Dr. Addison said of the GH¢10.1billion loan defaults of the banks in receivership, only GH¢849million has been retrieved as of now. The proceeds, he said, were realised through loan repayments by customers, placements repaid, proceeds from sale of vehicles, bonds, other income – interest from placements made and the refund of commissions paid.
The Governor has therefore called on the judiciary and other investigative bodies to expedite their processes in order to retrieve all the funds locked up in loans, and other investments made by the banks before their licences were revoked.
“As regulators, we are very grateful for the support received – but urge the investigating bodies and judiciary, government, Chief Justice and security agencies to work steadily on recovering certain assets from shareholders, directors and loan defaulters of the erstwhile defunct banks. Currently, there are fifty-two cases in various courts of the country, 50 of which have been assigned to specific judges or courts.
“In addition, over sixty cases have been referred to the Special Investigative Team. The task is enormous, but we have confidence in our judicial system to bring those culpable to justice. The Bank of Ghana will continue to work with the Receiver to ensure that bottlenecks in the receivership process are cleared for an orderly winding-down of the defunct banks,” he said.
Dr. Addison further maintained that actions of the regulator have resulted in a healthy and strong financial sector, as banks are now more profitable than before and confidence among depositors has improved – adding that the central bank will strengthen its regulatory role and exercise more vigilance going forward.
“I have every reason to feel confident about gains and achievements made so far in the financial sector. The financial sector is currently healthier and better able to withstand external shocks compared to the financial sector at the beginning of 2017. It is better capitalised, liquid, profitable and more efficient, and has adequate capital buffers to enable it manage any adverse external developments. Such an optimistic outlook seemed nearly impossible in 2017 when we started these reforms.
“A dynamic growth-oriented financial system must be strong, well-capitalised, and effectively supervised within a fair regulatory environment in accordance with international best practices and standards. There is therefore a huge regulatory burden on us to remain vigilant toward all forms of risk in the banking sector, and to tighten our regulatory and supervisory responsibilities to continue with efforts at strengthening and stabilising the banking industry.
“These reforms will ensure the safety and soundness of banks, aligning macro and micro-prudential risks to bank capital, and addressing cross-sectoral and cross-border risks to the industry. In order to address potential risks and properly risk-profile individual banks, we are taking steps to revise the current risk-based supervision framework in line with current developments in the global banking environment,” he said.