President of the National House of Chiefs, Togbe Afede XIV has punched holes in the manner by which the Bank of Ghana (BoG) handled its recent cleanup of the Savings and Loans sector, saying the approach was not good.
About twenty three savings and loans companies had their lincences revoked after being declared insolvent by the central bank.

According to a statement from BoG, “The revocation of the licences of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”

But the former member of Government' economic management team believes the Central Bank could have been handled its crackdown on the sector in a more helpful way than it did.

“I think that the approach could have been different – less destructive than we have today and should have been informed by a lot of scientific analysis,"the former Chairman of the National Investment Bank (NIB) said told joyfm.

“It is important that some of these things are approached with a little more patience so that you don’t create more problems than we are trying to solve,” he added.

The Central Bank maintains that its assessment of these institutions  no indicates they had no " reasonable prospects recovery and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors".
But Togbe Afede argues the companies that operated genuinely, should have been given the opportunity to bounce back.

A complete closure, in his view, makes the Savings and Loans sector confused leaving many of the companies to cave in when they must not.

“The kind of panic that we saw resulting from the way the process was handled, itself was not good. It could have been managed a little better so that the genuine ones who have done genuine lending could survive just by their debts being set off here and there.

“I think that a little more caution could have helped the process,” he stressed.