On August 1, 2018, the Bank of Ghana announced the consolidation of five indigenous banks under a newly created Consolidated Bank Ghana Limited.
The collapse followed the insolvency of these banks and their inability to meet certain banking demands.
Earlier in 2017, the Bank of Ghana closed down two other banks, UT Bank and Capital Bank, for similar issues. Their operations and management were handed to GCB Bank.
The closure of all these banks has led to the loss of jobs with some resorting to some labour unions for help despite the new ban assuring of training those to be laid off in some skills.
According to the MP, the Bank of Ghana has questions to answer with regard to its efficiency and effectiveness in managing the banks.
Speaking on TV3‘s New Day on Saturday, September 1, 2018, he said the BoG has failed to ensure due diligence in many instances.
“I have always said that the Bank of Ghana itself is a candidate for consolidation,because the same crimes and offences that these banks are guilty of; poor corporate governance structures, the Bank of Ghana is guilty of.”
Sam George noted that the Bank of Ghana has failed in performing its supervisory duties.
“The Bank of Ghana took GHȻ620 million as liquidity support and gave to a bank without doing due diligence to ensure that there were proper corporate governance structures in there. The Bank of Ghana gave another GHȻ800 million.
“These banks are in this distress because they gave out facilities and depositor’s money without ensuring that the loans were properly collateralized. You are giving liquidity support, what due diligence did you as a bank also do to find out that money will also be protected?” Sam George questioned.
He said government is not to be blamed solely for the failure of the collapsed banks, and the loss of jobs it has led to.
“I have always said the Bank of Ghana itself has questions to answer, and when I talk about the Bank of Ghana, I am talking about the institution which spans from the previous NDC administration, because it will be unreal and dishonest on my part to suggest that all of these problems started from the 7th of January 2017 itself.”
Collapsed banks and effects on jobs
On the issue of job losses resulting from the collapse of some banks, Sam George noted that Governor of the Bank of Ghana was not truthful with Ghanaians.
He said the BoG Governor, Dr. Ernest Addison, assured Ghanaians that there was going to be no job losses as a result of the consolidation of the five banks, but that is not the case.
Some 1, 700 staff of the Royal Bank, Construction Bank, Sovereign Bank, uniBank and Beige Bank lost their jobs after their respective banks were consolidated.
About 500 staff of the Capital Bank and UT Bank also lost their jobs following the collapse of those two banks.
“When the Governor of the Bank of Ghana made the announcement about the consolidation, if he had said this will come with job loses…, this questions the credibility of the Bank of Ghana Governor.”
He also said the NPP government has failed on its promise of creating more jobs for the Ghanaian people, and that more jobs have been lost under the NPP administration.
Sam George expressed worry over the number of jobs that have been lost and its impact on many families on the country.