The Ranking Member of Parliament’s Finance Committee, Cassiel Ato Forson, has advised the Bank of Ghana (BoG) and government to ensure that it does not ceded the financial sector to foreigners.
“Government should make sure that going forward they don’t end up ceding the financial sector to foreigners because the way they are going they will end up ceding the financial sector to foreigners, I don’t think that is good for this country.
It is not the way we want to go, because clearly when we create good economy and good environment, we want the ordinary Ghanaian to benefit, so what’s the point if we create a sound financial sector and ordinary Ghanaian business man is not benefiting , so there may be issues,” he said.
His comments follows the recent announcement by the BoG that it is appointed KPMG as the administrators of indigenous bank, uniBank, following various regulatory infractions and the bank’s precarious financial position.
According to Mr. Forson, the Minority is disappointed because: “We believe that government has a responsibility in ensuring that there is indigenous Ghanaian participation in the banking sector, supervising the collapse of three indigenous banks within a spate of three months is shocking and alarming.”
Furthermore, he indicated that in other jurisdictions, the state has come out to support these ailing banks and strongly believe that the state could have acted better.
“The key point is simple, the cost in terms of how much you will need to resolve the issue in this financial sector is sometimes more costly than allowing the bank to operate and guiding them through corporate governance and giving them some liquidity support,” he noted.
He also explained that for instance the tax payer is going to pay GH₵2billion for the purposes of the collapse of two small banks in the case of UT and Capital Bank representing about 1percentage of GDP.
“My concern is that this will mean that going forward taxes are going to be raised and the proceeds are going to be used to service the debt.
In the case of uniBank, they are the size of the two banks put together [UT and Capital bank], in fact it is the largest indigenous private bank in Ghana and it has also gone down, so if the two put together is about GH₵2billion, then be ready to shoulder another burden of GH₵2billion. So put together, you are talking of GH₵4billion representing two percentage of GDP; the tax burden is going to increase.”
Mr Ato Forson, a former Deputy Finance Minister under the previous administration, also accused the central bank of cherry picking in the case of uniBank, since with the previous two banks [UT and Capital banks] it was not elaborate as this current one.
He also stated that Parliament will summon the Finance Minister and the BoG Governor to the House before it rises, to seek further clarification and detailed information on why Unibank was up for administration.
Background
The Bank of Ghana (BOG) on Tuesday announced that uniBank Ghana Limited (UniBank) has been placed under administration.
The appointment of an official administrator, according to the central bank, is aimed at saving uniBank from imminent collapse.
In a press conference addressed by the Governor of the Bank of Ghana, Dr. Ernest Kwamina Yedu Addison, he said: “The Central bank in exercise of its powers under Sections 107 and 108 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) the Bank of Ghana has, effective today 20th March 2018, appointed KPMG as Official Administrator for UniBank Ghana Limited (UniBank).
Section 107 of Act 930 empowers the Bank of Ghana to appoint an Official Administrator to take official control of a bank when its capital adequacy ratio (CAR) has fallen below 50% of the required minimum of 10% (i.e. below 5%).”
Mr. Addison commenting on whether or not UniBank will be returned to its owners said, under section 108 of Act 930, the Official Administrator is authorized to exercise a variety of powers.
Source: http://peacefmonline.com/pages/business/finance/201803/347745.php
“Government should make sure that going forward they don’t end up ceding the financial sector to foreigners because the way they are going they will end up ceding the financial sector to foreigners, I don’t think that is good for this country.
It is not the way we want to go, because clearly when we create good economy and good environment, we want the ordinary Ghanaian to benefit, so what’s the point if we create a sound financial sector and ordinary Ghanaian business man is not benefiting , so there may be issues,” he said.
His comments follows the recent announcement by the BoG that it is appointed KPMG as the administrators of indigenous bank, uniBank, following various regulatory infractions and the bank’s precarious financial position.
According to Mr. Forson, the Minority is disappointed because: “We believe that government has a responsibility in ensuring that there is indigenous Ghanaian participation in the banking sector, supervising the collapse of three indigenous banks within a spate of three months is shocking and alarming.”
Furthermore, he indicated that in other jurisdictions, the state has come out to support these ailing banks and strongly believe that the state could have acted better.
“The key point is simple, the cost in terms of how much you will need to resolve the issue in this financial sector is sometimes more costly than allowing the bank to operate and guiding them through corporate governance and giving them some liquidity support,” he noted.
He also explained that for instance the tax payer is going to pay GH₵2billion for the purposes of the collapse of two small banks in the case of UT and Capital Bank representing about 1percentage of GDP.
“My concern is that this will mean that going forward taxes are going to be raised and the proceeds are going to be used to service the debt.
In the case of uniBank, they are the size of the two banks put together [UT and Capital bank], in fact it is the largest indigenous private bank in Ghana and it has also gone down, so if the two put together is about GH₵2billion, then be ready to shoulder another burden of GH₵2billion. So put together, you are talking of GH₵4billion representing two percentage of GDP; the tax burden is going to increase.”
Mr Ato Forson, a former Deputy Finance Minister under the previous administration, also accused the central bank of cherry picking in the case of uniBank, since with the previous two banks [UT and Capital banks] it was not elaborate as this current one.
He also stated that Parliament will summon the Finance Minister and the BoG Governor to the House before it rises, to seek further clarification and detailed information on why Unibank was up for administration.
Background
The Bank of Ghana (BOG) on Tuesday announced that uniBank Ghana Limited (UniBank) has been placed under administration.
The appointment of an official administrator, according to the central bank, is aimed at saving uniBank from imminent collapse.
In a press conference addressed by the Governor of the Bank of Ghana, Dr. Ernest Kwamina Yedu Addison, he said: “The Central bank in exercise of its powers under Sections 107 and 108 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) the Bank of Ghana has, effective today 20th March 2018, appointed KPMG as Official Administrator for UniBank Ghana Limited (UniBank).
Section 107 of Act 930 empowers the Bank of Ghana to appoint an Official Administrator to take official control of a bank when its capital adequacy ratio (CAR) has fallen below 50% of the required minimum of 10% (i.e. below 5%).”
Mr. Addison commenting on whether or not UniBank will be returned to its owners said, under section 108 of Act 930, the Official Administrator is authorized to exercise a variety of powers.
Source: http://peacefmonline.com/pages/business/finance/201803/347745.php
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