Governor of the Central Bank, Dr Ernest Addison, has debunked suggestions that the banking sector is in crisis.

According to him, about 90% of industry players are operating and functioning normally.

The Bank of Ghana within a spate of 12 months has revoked the licenses of seven universal banks in a bid to sanitize the financial sector.

The banks, according to the regulator, had their licenses revoked due to poor corporate governance and misconduct.

In an interview with the Business and Financial Times, Dr Ernest Addison said the banking sector is fairly stable despite recent developments.

“When people talk about banking crisis, then it is an exaggeration. 90% of the industries are operating as normal. That I think is a message that has not been properly articulated. Secondly, the local indigenous banks are relatively stable. The indigenous banks that are having problems are those that are perceived to be badly managed with major corporate governance issues so the industry is fairly robust.”

‘Ghana’s banking crisis’

The collapse of some seven local banks within one year has fueled suggestions that Ghana’s banking sector may be in crisis. The affected banks were UT and Capital Bank, both of which have been taken over by the state-owned GCB Bank.

The others were Beige Bank, Sovereign Bank, Construction Bank, uniBank, and Royal Bank, all of which have been consolidated into Consolidated Bank of Ghana.

The decision to collapse all the banks were primarily because they had all become highly insolvent as a result of various reasons including poor corporate governance decisions.

Banking crisis a result of lawlessness – Akufo-Addo

President Nana Akufo-Addo had earlier attributed various problems that plague the country to the disregard for law.

He was making reference to the banking crisis that has seen the collapse of seven indigenous banks over a 12 month period.

“The story of every bank that has had problems, be they indigenous Ghanaian banks or international banks… each one can be traced to someone or some people breaking the law or trying to cut corners by flouting regulations,” he said at the 2018 Annual Conference of the Ghana Bar Association last Monday.

President Akufo-Addo also acknowledged the social cost of the banking crisis that has led to hundreds of job losses.