Dr. Micheal Dawson, a financial analyst, has stated once more that the central bank’s effort to clean up the banking system was a necessary one.
He considers it sad that some claims the exercise had political undertones have been made.
Despite the liquidity support that was being provided to some banks at the time, he noted that the clean-up operation was meant to save millions of depositors’ funds.
“We don’t need to debate whether the exercise was politically driven any longer because millions of client funds were at jeopardy and banks were on the verge of failure.
If the exercise had not been conducted, it would have had a huge impact on the entire banking industry.”
“What the central bank did was rather commendable in raising the red flags of certain actions by directors of now insolvent banks who at times could not account for some of their depositors’ funds.”
The economist said this in reaction to remarks made by former UT Bank boss, Prince Kofi Amoabeng, who suggested that the defunct Heritage Bank was politically targeted by the central bank.
But according to the BoG, Heritage Bank among other things obtained its banking licence on October 4, 2016 on the basis of capital with questionable sources.
Furthermore, the bank was unable to meet the new minimum capital requirement of GH¢400 million as of December 31, 2018.
As part of its efforts to clean up the banking sector, the Bank of Ghana examined the affairs of a number of banks which included Heritage Bank Limited and discovered a number of anomalies relating to its licensing, the sources of its capital, and related party transactions.
The central bank, however, determined, pursuant to sections 9 and 12 of Act 930, the majority shareholder of the bank, Mr. Seidu Agongo, does not meet the “fit and proper person” test.
This led to the revocation of the bank’s operating license under section 16 (1) (a) (7) and (8) of Act 930 of the Central Bank.