- Mahama says setting a minimum capital for all banks to meet is not the best solution
- A total of nine banks lost their licenses to operate as the bank of Ghana implemented a number of reforms to sanitize the financial sector
Former President John Dramani Mahama believes the government could have done better with regards to how it handled the banking crisis.
According to him, it was not appropriate for the Central Bank to set a minimum capital for all banks to meet.
“We have had crisis in the banking sector before, it won’t be the first time we have been faced by a crisis in the sector but the way it has always been handled has been to help save the banks rather than collapse them,” Mahama told Accra-based Citi FM.
“Right now the government is spending between GHS12 and 15 billion to pay for the debt created by the collapse of the banks. Half of this money could have bailed out all of these banks and government could have put in the supervision to make sure they do the right thing and be able to emerge from the crisis in which they were and in.”
The Bank of Ghana has revoked the licences of nine indigenous banks in the last two years over their insolvency.
These include the Royal Bank, Sovereign Bank, The Construction Bank, Beige Bank, UT Bank and Capital Bank.
However, Mahama believes the government could have handled the banking crises better than it did.
In his view, consolidating the insolvent banks was not the best solution since it led to many people losing their jobs.
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