The flagbearer of the opposition National Democratic Congress (NDC), John Dramani Mahama, has promised to give back licenses of now-defunct banks to their owners, because they were unjustly revoked.
Though Mr. Mahama did not state which licences were revoked unjustly, he promised to return them “as far as practicable.”
In the event that he wins the 2024 presidential elections and chooses to walk the talk, owners, including his main contender in the primaries, who withdrew from the race in the nick of time, Dr. Kwabena Duffuor, may have his UniBank back in operation.
Other personalities who may have their banks returned to them are Prince Kofi Amoabeng’s UT Bank; Dr. Papa Kwesi Nduom’s GN Bank and Seidu Agongo’s Heritage bank among others.
The former president, who was elected as the flagbearer of the NDC for the third time, made the promise yesterday in Tamale, when he was giving his acceptance speech, following his endorsement last Saturday.
While speaking on the economy, Mr. Mahama noted that “as far as practicable, banking licenses that were unjustly cancelled by this government would be restored.”
BANKING CLEANUP
During the 2016 campaign, Dr. Mahammudu Bawumia, then running mate of the opposition presidential candidate of the New Patriotic Party (NPP) revealed that some banks were on the verge of collapse as a result of insolvency.
It then became a promise by the NPP presidential candidate, Nana Addo Dankwa Akufo-Addo to clean up the banking sector to ensure a robust financial sector to support economic growth, in case he won that election.
In 2017 the Bank of Ghana embarked on a comprehensive reform agenda, through which the licences of about 16 universal banks in the country were revoked in two years.
While some banks had their licences revoked, others were merged for their inability to raise the GH¢400 million minimum capital requirements as of December 31, 2018.
The Central Bank established the Consolidated Bank of Ghana with the assets and liabilities of seven collapsed banks. The clean-up exercise reduced the 33 banks in Ghana to 23.
PROSECUTION
The Central Bank, having appointed a Receiver to manage the assets of the banks, which licences were revoked, initiated legal actions against the directors of these banks.
The directors of UT Bank, Biege Bank, Capital Bank, Uni Bank and GN Bank among others were variously charged following the collapse.
Last week, an Accra High Court rejected a request from convicted William Ato Essien to suspend the imposition of a custodial sentence and give him an opportunity to renegotiate with the state.
On December 13, last year, the founder of the defunct Capital Bank was convicted and ordered to pay GH¢60 million to the State after entering into an agreement with the State under Section 35 of the Court’s Act 1993, Act 459.
Prior to the State commencing prosecutions in the banking sector, investigations carried out by the regulator, based on which some banks collapsed, revealed how some directors siphoned depositors’ funds.
Others, according to the probe, channeled the funds in ways that did not inure to the advantage of the banks and placed its sustainability on red alert.
POLITICS
The revocation of licences for some banks by the Akufo-Addo government was met with huge opposition by political opponents, under whose tenure Dr. Bawumia had said some seven banks were on the verge of collapse. But the NDC argued that the Akufo-Addo government could have saved those banks instead of revoking their licences.
The NDC in particular argued that those banks required little capital adequacy to survive, making it unreasonable to waste huge amount of money to collapse them.
Meanwhile, the Central Bank’s probe revealed that the Mahama government had supported some of these banks with some liquidity, but could not save them.
INVESTMENT
In his acceptance speech yesterday, Mr. Mahama said he would promote robust local participation in telecommunications, tourism, and other sectors to grow the economy.
He further remarked that should he win the next presidential election, he would “restore indigenous Ghanaian investment in the finance and banking sectors and create a tiered banking system that will serve various segments of the market.
We will give the opportunity for experienced banking hands who were laid off to secure their careers once more and move from the menial jobs they were forced into.”
