DIRECTOR AT the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey has charged government to pursue and retrieve all monies from persons who took money from banks, following the banking sector clean-up exercise.
Governor of the Bank of Ghana, Dr. Ernest Addison disclosed back in May 2021 that only GH¢1.7 billion out of a targeted GH¢25 billion, has been recovered from the banking sector clean-up the government undertook four years ago.
Professor Peter Quartey noted that all must be done to build confidence in the financial system as the economy rebounds from the Covid-19 pandemic.
“The banking sector clean-up came with a lot of costs, but some persons were mentioned as being culpable. So we should pursue such persons to recover funds taken from banks to ensure sanity prevailing,” he said.
“By extension, all the things I have mentioned should apply to other financial institutions like microfinance, savings and loans, and other non-bank financial institutions, so that people can have confidence in the financial system to enable us to stimulate the economy,” he added.
Prof. Quartey cautioned against a return to the dark days of the banking sector.
According to him, the new board of the Bank of Ghana should, among other things, continuously assess the soundness of the industry to ensure any issues are effectively dealt with.
Ghana’s banking sector reforms, which led to a reduction of the number of banks from 34 to 23, date back to 2017, when the BoG embarked on a comprehensive reform agenda, with the objective of cleaning up the banking industry.
Commenting on the future of the industry, Professor Peter Quartey highlighted the importance of improved corporate governance going forward.
“We have in the past seen some undesirable activities or actions that have caused some banks to collapse. We don’t want to go back to the dark days. So I would expect the new Bank of Ghana board, to also focus on ensuring that there’s soundness within the banking system. And that relates to my next point, good corporate governance. I think the Bank of Ghana has come with all the directives and some documents to guide that. That should be the focus.”
“We need good corporate governance practices to ensure that yes people who deserve to be on boards are there, people who are qualified to be there are there, and also that banks ensure that they employ the right people, the right processes are put in place to ensure that there is good corporate governance. You don’t bring your friends, your cronies, your relatives as board members, when perhaps they are not qualified. And I think the Bank of Ghana is doing a lot in that respect. So I expect them to deepen that activity,” he explained.