Banking crisis not over; we'II see more banks 'collapse' before December - Economist predicts

Chattered Economist, Mr Emmanuel Amoah-Darkwa is predicting the collapse of more banks before December 2018.

He is arguing that, ''Ghana is currently not out the woods'' yet and some banks will go under receiverships before the year ends, he predicted on Frontline on Rainbow Radio 87.5FM.

Currently, some customers of some local banks have resorted to panic withdrawals following the collapse of some local banks in the country.

The situation has forced business mogul and Chairman of Groupe Nduom, Dr. Papa Kwesi Nduom, to lead a campaign against panic withdrawals in some selected communities where GN bank is located. Commenting on the panic withdrawals, Mr Amoah-Darkwa, was worried the situation if not checked may collapse the banks involved.

In his view, there is no bank in the world that would be able to pay depositors all their deposits when they all rush to it for their deposits.
We will see a lot of banks go under receivership before the year goes to an end.’’

The challenges confronting the banking sector he suggested are also ongoing in the savings and loans, micro-finance and rural banks.

He stated that these financial firms are not adhering to corporate governance, breach regulations and "the day the Bank of Ghana will decide to deal with them will be shocking.’’

The state he lamented has incurred GHC8 billion debt as a result of consolidating some five local banks. He was sure authorities might soon act to prevent any unforeseen circumstances.

The Central Bank has hinted it will soon shut down, savings and loans company that are insolvent. Governor of the Bank of Ghana (BoG), Dr Ernest Addison made the revelation during a meeting with Journalists after meeting to review the health of the Economy few weeks ago.

According to the Governor of the Bank actions taken so far to stabilise the banking sector would not be different from the Savings and Loan Companies.

He added that it is critical to allow Savings and Loans Companies that are in good standing are allowed to operate.

Some of the savings and loans companies are said to be in a “sorry financial state” as a result of the panic withdrawals that has hit most of them. The Association of Savings Companies recently petitioned the Bank of Ghana to support some of their members said to be in financial distress.

The Executive Secretary of the Association, Tweneboa Kodua Boakye, had explained that the petition to support the troubled firms was to prevent most of them from going down.