Prosecute persons implicated in banking sector clean-up – BoG to gov’t
The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has implored the government to take legal action against shareholders of banks and financial institutions implicated in the financial sector clean-up.
From mid-2017 to the end of December 2018, the Bank of Ghana undertook a banking sector clean-up, recapitalisation, and various regulatory reforms to enhance the safety, soundness, and stability of the financial system and thereby support economic growth.
Dr Addison emphasised that individuals responsible for mismanagement or misconduct should be held accountable for their actions and inactions.
He expressed concern over the government’s sluggish approach to addressing these issues and urged more prompt and decisive action.
At a joint press conference with the Ministry of Finance and the International Monetary Fund (IMF) on Monday, July 1, Dr Addison highlighted the need to recover funds misappropriated or mishandled during the clean-up exercise.
He underscored the importance of ensuring justice and that those responsible for financial irregularities face legal consequences.
“It is taking a long time to bring all of these matters to a close. However, it is important that the state needs to persevere and pursue these shareholders who have misappropriated depositors’ funds.”
“The large amounts of monies that we claim were used to clean up the financial sector, some of these monies are being held in assets by the shareholders and I think that the law needs to be allowed to do its work,” he said.
About the banking sector clean-up
The government in 2017 undertook the banking sector clean-up under the supervision of the Finance Minister, Ken Ofori-Atta.
The exercise saw a reduction in the number of banks from 34 to 23, whilst 347 microfinance institutions, 15 savings and loans and eight finance houses had their licences revoked.
A number of the institutions that had the licences revoked were found to have varying degrees of corporate governance lapses.
The total estimated cost of the state’s fiscal intervention, excluding interest payments, from 2017 to 2019 was pegged at GH¢16.4 billion.
The government in 2020 claimed that it spent about GH¢21 billion on the banking sector clean-up exercise.