Former Finance Minister, Seth Emmanuel Terkper Former Finance Minister Seth Terkper has discounted claims that the previous government’s negligence led to the collapse of many banks in the country.
Mr Terkper in an interview with Kwame Minkah on Power 97.9 FM revealed that the National Democratic Congress (NDC) government made lots of sacrifices to save most banks from collapsing, including the then Ghana Commercial Bank.
Since 2017, the Central Bank has revoked the licences of 9 universal banks, 347 microfinance companies, 39 microcredit companies, 15 savings and loans companies, 8 finance house companies, and 2 non-bank institutions.
Notable among the banks were UniBank, Beige, Heritage, Capital, UT and GN Banks.
The regulator said the said financial institutions were undercapitalised hence the revocation of their licenses after they were given grace period. The BoG added its approach was to protect the interest of depositors in accordance with Sections 123 to 137 of Act 930.
There has been a nationwide debate over the approach used by the central bank in its clean–up exercise. While some believe that BOG is being inhuman by not applying the human face to the exercise, others are of the view that the approach was a necessary evil, blaming the previous government for negligence.
But Mr Terkper believes the approach by the ruling New Patriotic Party (NPP) government to collapse most of the banks was problematic therefore he cannot be blamed for the financial mess that has shaken the foundation of the banking industry and has caused thousands of job losses.
“We changed the Banking ACT…What we need now is to strengthen what we call the bank resolution so that when a bank is failing you’ll be able to [save it],” Mr Terkper said while arguing that the banks could have been saved through the Non-Performing Assets Recovery Trust (NPART) which was set up under the Financial Sector Adjustment Programme (FINSAP) as a vehicle to acquire the non-performing loans of distressed banks.
“…For me, the point is what’s our strategy? And we’re going to have a strategy just as we had a strategy for our debts…Well, if you expect banks to re-capitalize because the economy is going up and down why don’t you do that incrementally so that every year they can be putting in some money, you know in re-capitalizing?” the former minister quizzed as he bemoaned the NPP government’s strategy.
Mr Terkper further explained that their administration put in stringent measures that sustained some […]