Minister of Justice and Attorney General, Godfred Yeboah Dame has defended the government’s banking sector clean-up.
The minister said an examination by the Bank of Ghana (BoG), showed poor corporate governance, non-performing loans, breach of directors’ obligations, credit risks, and regulatory lapses were responsible for the vulnerabilities.
Speaking on the financial sector at Cambridge University on Monday September 5 Mr. Dame said “Between August 2017 and January 2020, Ghana was hit by a severe banking crisis that affected several institutions, and several indigenous banks, as a result of which the central bank ordered a take-over of some of the banks by the Ghana Commercial Bank.
“Five indigenous banks were consolidated to form the Consolidated Bank Ghana Limited. A deeper examination of the banking crisis showed poor corporate governance, non-performing loans, breach of directors’ obligations, credit risks, and regulatory lapses were responsible for the vulnerabilities the banks were exposed to,” He added.
Revealing some culprits leading to the collapse of the banks and resulting in the Banking Sector Clean-up, Mr. Dame said some auditors reneged on their roles and were complacent.
“Internal auditors who were required to superintend proper accounting practices were complacent and covered up Executive Directors. The recent banking crisis held ramifications for the entire economy. It was the most severe economic crisis to affect Ghana since independence.”
However, Mr. Dame said after “painstaking investigations, dockets of the financial crime are almost ready for the prosecution to commence in earnest.”