The Bank of Ghana (BoG) Governor, Dr Ernest Addison, says he has had a tough time cracking the whip on underperforming banks in the country, explaining that the aftermath of the decision risk threathening the loyalty of his friendship.
In a chilling revelation that gave a hint of how the central bank’s new sternness on operational lapses could cost Dr Addison and his staff life-time relationships, the governor said BoG’s latest decision to withdraw the licences of five banks was threatening to sour his more than three-decade old friendship with the now deposed Managing Director of the Royal Bank Limited, Mr Osei Asafo-Adjei.
Dr Addison and Mr Asafo-Adjei were mates at the Cambridge University in United Kingdom (UK), where their bond of friendship was first struck.
No personal feelings
Painting a scenario that suggested how difficult it was for him, the governor told bank executives at the annual Ghana Association of Bankers (GAB) luncheon on August 3 that after BoG had publicly withdrawn the licences of the five banks on August 1, including that of the Royal Bank, he reached out to Mr Asafo-Adjei, asking him not to take the action personal.
“You know the MD of Royal Bank has been my friend since we were mates at Cambridge,” he told the gathering of bank executives at the programme.
“We used to drink beer on Friday nights. So, when this happened, I sent him a text message and said I hope you have not taken this personal. He is yet to respond,” Dr Addison said.
He, however, assured that the central bank will continue to take relevant decisions to help repose public confidence in the banks and strengthen the financial sector and the economy at large.
Painful decisions
On August 1, Dr Addison said at a news conference that the central bank had withdrawn the licences of the Royal, Construction, BEIGE, uniBank and Sovereign banks for breaching various regulatory rules.
It subsequently approved a purchase and assumption (P&A) agreement for Consolidated Bank Ghana Limited to takeover some assets and all liabilities of the five erstwhile banks under an arrangement that will cost the country some GH¢5.76 billion.
The withdrawal of the licences was the second of its kind in 12 months. In August last year, the BoG withdrew the licences of UT and Capital banks for insolvency and approved a similar P&A agreement for GCB Bank to takeover selected assets and liabilities of the defunct banks.
That deal cost GH¢2.2 billion.
While admitting the painful nature of the decision, the Director of Banking Supervision Department of the BoG, Mr Osei Gyasi, said in an interview that “management thought that was the best decision to take under the circumstances.
Asked if the decision took into consideration the cost implications, Mr Gyasi said the considerations covered everything and it was agreed that “that was the best in terms of everything.”
Like Dr Addison, Mr Gyasi said it was not an easy decision to take although necessary for the strength of the entire financial sector.
“As a regulator, sometimes you are like a doctor and you know how doctors feel when their patients die, right?
“May be the doctor might have worked on the patient for several years, trying to get the patient around the critical corner for the patient to recover and come back to normal life but sometimes it so happens that the patient is unable to make.
“Now, you can just imagine how the doctor feels. It is the same way we also feel; we don’t take delight in seeing banks go down but sometimes, you do all you can but you will just have to take the appropriate decisions.
“That is how we feel; we are not happy but our work is to ensure that we have a vibrant and robust financial sector,” he added.
Source: Daily Graphic
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HOW CAN U STILL MAINTAIN THEM WITH YOUR LOW VISION AND WITCHCRAFT. LEAVE MENZGOLD ALONE. THEY DONT TAKE DEPOSIT. THEY TRADE GOLD. IF YOU LACK KNOWLEDGE ON WHAT THEY DO, SEEK CLARIFICATION OR GO TO COURT
ALUTA AND WK, I am not sure you know the two of you know exactly what is going on here. assuming you both deposit GHc200,000.00 each in a bank and cannot withdraw your own money as and when you wish, would you be happy? if you deposit money in a bank, your money is supposed to be safe there, so you can walk in anytime to withdraw cash. The Bank of Ghana is simply protecting all those who have gone to deposit their monies in banks. these collapsed banks have not done what they are supposed to do. do you guys want people to deposit monies in banks and later go beg before they receive their own deposits? please get educated on the banking industry before you come out with such threats. Thank God Nana Akuffo Addo has given Ghanaians free SHS. get yourselves educated and stop these f........ness The decision Governor Addisson has taken is not a personal one. it is to save people from being scammed.why, have you people forgotten about the people who died as a result of what Pyram did?
Peacefmonline, are you a joke or what? Allowing this comment by one WK on your site is something an ignoramus will allow. I hope you will report this comment to the police CID and also take it down. The comment is threatening the governor with death, for goodness sakes.
i don't think Aluta & WK understand the issues at stake. these are the very people who are destroying this country due to their warped understanding of financial issues and what sound business principles are all about. Dr. Addison is doing a very good job; posterity will prove him right
@WK and Aluta. Have you taken your time to read the report from Bank of Ghana? Why are you not questioning the local banks about what BOG is saying about them? Is it all local bank the have been closed down? If a bank submits doctored balance sheet do you think such a bank and its directors must be applauded.The foreign banks are being managed by Ghanaians by they are complying with the laws, rules and regulations without blemish so why should they be worried. Go and tell the Directors and Managers to stop the multi investments and concentrate on the banking sector to for good and proper returns out of their investment and depositors monies which in all respect does not belong to them to be investing in real estate. If a director confirms that the investment in the real estate will be returned to the bank very soon, then we should sit down and wait for him while depositors are suffering. HEADS MUST ROLL. THEY WILL GO AND SEE NO MORE. THE BANKING SECTOR MUST BE KEPT CLEAN.
Ernest Addison I TELL YOU VERY SOON YOU WILL NOT ENJOY GOOD LIFE FOR WHAT YOU ARE DOING ON LOCAL BANKS AND MENZGOLD GHANA. THAT POSITION YOU OCCUPY IS NOT PERMANENT YOU WILL SURELY BE SORRY SOON AND THE WE KID PEOPLE WILL COME AFTER YOU SOON.YOU WILL REGRET AND REMEMBER THAT IT IS NOT EVERYTHING YOU WILL DO TO HAVE GOOD IMAGE FROM YOUR MASTER/BOSS WHO GAVE YOU THAT SEAT.EVEN AKUFO ADO WILL NOT DO THAT TO COLLAPSE LOCAL BANKS AND YOU ARE PLANING TO DO SAME TO MENZGOLD? IF YOU LOVE YOUR FAMILY AND YOUR CHILDREN THEN RESCIND YOUR PLAN ON MENZGOLD ASAP OTHERWISE YOU WILL NOT STAY LONG IN THAT OFFICE THERE PAST GOVERNORS BEFORE YOU ASK YR SELF WHY ONLY YOU ON YR TURNER WITHIN 18 MONTH ALL THIS BANKS ARE DAMAGE?YOU SHALL SURELY GET THE BULLET SOON ON TRYING ANYTHING ON MENZGOLD WILL NOT ALLOW YOU.
THROUGH YOUR POOR OR BAD SUPERVISION COUPLED WITH YOUR DECISIONS TO COLLAPSE THESE BANKS YOU ARE GREATLY AFFECTING AND PUNISHING GHANAIANS AT LARGE SINCE YOU ARE MORE OR LESS SHRINKING THE ECONOMY RATHER THAN EXPANDING IT. SOME OF THE UT AND CAPITAL BANKS STAFF ARE LANGUISHING AT HOMES WITH THEIR TWO OR THREE CHILDREN AND WONDERING HOW TO GET THE NEXT MEAL ON TABLE FOR THESE INFANTS. WHEN YOU ACT THINK WIDELY ABOUT OTHERS WHO DO NOT HAVE SUCH OPPORTUNITIES THAT YOU ARE HAVING. ANOMA EN TO A O GINA HO. I DIDN'T SAY IT BUT SOMEDY IN POSITION OF AUTHORITY OF A STATE THAT YOU AND ME KNOW SAID IT. ABI, HE DID NOT LIE HE WAS RIGHT!