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The Central Bank has somewhat admitted culpability in the collapse of some five financial institutions in the country. 

On Wednesday, the Bank of Ghana (BoG) announced the merging of five banks to form Consolidated Bank Ghana Limited.

The beleaguered banks are: UniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited.

Banking Licenses Obtained Under False Pretenses

BoG explained that Beige, Sovereign and Construction banks obtained their banking licenses under false pretenses through the use of suspicious and non-existent capital.

“Beige Bank and Construction Bank were each granted provisional licenses in 2016 and launched in 2017. Subsequent investigations conducted by the Bank of Ghana, revealed that similar to the case of Sovereign Bank, both banks obtained their banking licences under false pretenses through the use of suspicious and non-existent capital, which has resulted in a situation where their reported capital is inaccessible to them for their operations,” the BoG said.

Heads Must Roll

Following news of the BoG's decision to merge the 5 banks, some financial analysts have held that the malpractices and illegalities at the banking supervision department of the Bank of Ghana could have been avoided if the BoG had enforced stronger due diligence practices. 

Some also argue that to inhibit others from replicating such practices, the Central Bank must arrest and indict, and maybe prosecute and jail its officials at the banking supervision department, as well as owners of the banks found culpable for the illegality.

Supervisory Role Not Adequate 

Speaking to the issue in an interview with Kwami Sefa Kayi on PeaceFM's "Kokrokoo" Thursday, Mrs Elsie Awadzi, 2nd Deputy Governor of the Bank of Ghana admitted that even though the banks were at fault, the "supervisory role" at the Bank of Ghana was "not adequate".

"We have therefore put things in place to enhance supervision and to ensure things like this don’t happen again. We are determined to change some of systems and processes for banks to perform better...we need to make our banking system better," she added.

Meanwhile, BoG has appointed Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.