Finance Minister Ken Ofori Atta has indicated that plans to merge NIB and ADB to create a development bank have not been abandoned.
Speaking at the Danquah Institute Forum on the Banking Sector Wednesday, Mr Ofori-Atta noted that government is committed to creating large banks to support the economy.
He said, “…I did mention that we are looking at the NIB, ADB coming together, I think we are still on that course, because at the core of that we’ll then be creating that capacity and to look at this whole industrialization – 1D1F in an organised and structured way with a strong institution that does that.”
Licensing of banks
Ken Ofori-Atta also raised concerns over what he calls too many individuals obtaining licenses to set up banks as well as the competency to manage them.
“… So when you open a bank in which there is so much forbearance and people who received the licenses do not meet the fit and proper test and they themselves are not bankers they create a certain situation.”
He said, “You can’t really blame the average retail person because once he/she sees that there is a licensed bank, he/she has to presume that it is being managed well... And when you look at your capacity as an institution and ask yourself how many banks or financial institution can you actually regulate and you don’t have your own ceiling as to your technical capacity, human capacity and you give more licenses than you can support it leads to certain weaknesses.”
Mr Ofori-Atta said, “These are difficult moments for all of us and it’s really kind of uncharted territory but I think that it requires courage to do the right thing so that even if there are mistakes they will be honest mistakes…”
Confidence in BoG
“But again I believe that the leadership at the Bank of Ghana has risen up to the challenge in a period that happens to be one of the most reprehensible in our financial industry and may be in in the many years to come,” he added.
Mr Ofori-Atta said, “We came into government with energy to reenergize the financial system and strengthen the architecture. I’m really very comfortable and confident with the new management of the central bank and that is really key, so we should hold them up and applaud them."
He added, "In that same vein as I mentioned, my letter is going up to them; ensuring that the go through the whole process as they’ve started already of finding out who opened the floodgate and what they did with liquidity support….so that never again will the Bank of Ghana be in the middle of such disgrace."
"In the end, I think we have essentially stopped the potential contingent from the finance into an economic crisis and I think people should be confident about that."
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