of the National House of Chiefs, Togbe Afede XIV is unhappy with the
manner in which the Bank of Ghana (BoG) handled its recent cleanup of
the Savings and Loans sector.
He believes the Central Bank could have been handled its crackdown on the sector in a more helpful way than it did.
Speaking to Joy News’ Kojo Yankson at the British High Commission in Accra, the former Chairman of the National Investment Bank (NIB) said “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.
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.
Afede acknowledges the many issues some of the Savings and Loans sector
fraught with but said the companies that operated genuinely, should
have been given the opportunity to bounce back.
complete closure, in his view, makes the Savings and Loans sector
confused leaving many of the companies to cave in when they must not.
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.
Bank of Ghana (BoG) on Friday, August 16 revoked the licences of
twenty-three insolvent savings and loans companies and finance house
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.”
statement added, “It is the Bank of Ghana’s assessment that these
institutions have no reasonable prospects of recovery, and that their
continued existence poses severe risks to the stability of the financial
system and to the interests of their depositors.”
actions were taken pursuant to Section 123 (1) of the Banks and
Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which
requires the Bank of Ghana to revoke the licence of a Bank or
Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana
determines that the institution is insolvent.”
The BoG also appointed Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.