The presidential candidate of the New Patriotic Party (NPP), has advised former president, John Dramani Mahama to educate himself properly about the banking sector cleanup before making unrealistic promises to Ghanaians during his campaign as the flagbearer of the National Democratic Congress (NDC).
Recall that Mahama vowed to restore the licenses of some banks and financial institutions closed due to the banking sector clean-up.
When asked what he thought of Mahama’s promise to the nation at his recent media engagement on Sunday, August 25, 2024, Bawumia explained the circumstances that contributed to the merger and shutdown of some banks and financial institutions, and why it was a wrong step to give back licenses to closed banks to operate again.
I’ll ask the former president, if he hasn’t read, to go and read the Receiver’s Report or the BoG’s report and acquaint himself before making any further comments on matters he clearly doesn’t understand.
We saved the deposits of 4.6 million bank depositors who really were going to lose their deposits if those banks were not saved. I do not understand whether the former president has taken his time to understand the banking sector. Some atrocious things were done, and this is why these banks had to be saved.
They were not collapsed; they were merged into other banks and no depositor lost 1 cedi. In fact, bad things happened, some of the banks broke all the rules and extended loans way above the single obligor limits.
“They were given, in some cases one billion by the Bank of Ghana to help them out of the mess, and they only got deeper into the situation. Other banks were given capital to save the situation, and they used that money to set up a Capital Bank, instead of rescuing the problem. They took the money from the Central Bank and set up another business which also collapsed. Some took money and invested in private properties.
So, it was against this background the governor came to report, and this was one of my nightmares in the last eight years. Most people did not understand how close we were to a collapse of the entire banking system. This is how we had to merge many of these banks into other banks and we saved 4. 6 million depositors.
