Banking Sector Blues - Newsfile on JoyNews (4-8-18)

[Music] you're welcome back this is news finally so most authoritative news analysis show am your host Samson Lodi and the enemy and I've got three of my guests seated already in the studio today we are doing an editor's at the Shing we're talking to getting the perspectives of editors hosts and analysts I mean not the ordinary ones people with sufficient enough experience who will also assist us to break down all the matters that have been on the front pages of your mind in the course of the week in a manner that we trust you'll get to appreciate them a lot more and hopefully see them without any inhibitions where the views require them to be as months as the situation requires them to do without looking back and looking on the heavy shoulders right so thank you very much it's time for my take but that's what I do I just do a quick something I don't do a quick reaction to a what I did last week and reserve the time for the rest of the discussion my take is actually a dedicated five minutes is only five minutes but it's supposed to be precious five minutes when I take an issue of importance and give it a legal you know talky talk to you about the legal implications and to seek to give you education legal education about an issue so it is the reason my take is always about law a good dose of the law is good a bit of it for you in your pocket also can help you so that's basically what I do so it takes me time to research the law and to ensure that within the five minutes I compress my views which are basically legal positions of gana particularly and also elsewhere so I hardly would have any feedback and seek to react to them I hardly do get feedback on them that is a criticism or a negative and this job we survive on feedback so I take all feedback if you have met me before and you have done the cliche you're doing a good job you would always be sure that I'll ask you that question what is it that I do that you don't like and as a feedback I normally ask people to give now there is a number of a number of guys particularly who again Ian so live outside of the country particularly in the US and they do criticism of a lot of things that's happening that's very good and we take all the feedback but when I write law and you are clueless about the law and you seek to project your social appreciation in a manner to suggest that the law is wrong I will not let you go with that wrong impression and infect other people with it so there are a couple of professors professors they I based in the US and they write to criticize almost everything in this country sometimes very good opinions you use them but on this occasion and I don't name the person writes a lot on the Ghana web and he knows himself now his view is a view of not in law because last week I shared that the victim of the midland savings and loans assault its grateful for what has happened to him myself together with lawyers for midland savings and loans start together we drafted a settlement agreement so that we don't sue midland savings and loans for civil you know damages and for compensating for her the criminal processes going on so I mentioned that she's grateful for what has happened to her she's thankful and is even forgiving and I'm prepared to join her to be forgiving however the criminal prosecution is going on and she's as yesterday she went to the Castaway area behind the CAF University with her family to inspect a two bedroom semi-detached property that's what she is getting and some amount of money in her account as well to start up any business that she deems fit she's now moving from the kiosk into a for herself and her family for forever she owns this is a house order it's a landlord and then also she moves from trophy selling to doing good business dignified life so to speak and the criticism has been that I mean his rear one has been that we have gone to settle something for her and to not allow the law to work and that in the US she could get even more than that by suing please you are so ignorant that you won't have this nothing in the US now the court have a way of determining how much compensating anybody gets she hasn't suffered any permanent disability so she's not she's not in a situation where she cannot continue her business and do her work and her dependents can no can not continue to survive so there will be no basis really to give a compensation in a suit that will be more than what she's got in which will amount to about sixty thousand US dollars if you if you put a value to all of it so I'm sorry you are so wrong and you need to keep you know open your mind and to to to be taught in the law the law actually allows settlements this is a civil aspect the criminal aspect to go on it is only Midland Savings and Loan status you know as it were but it's way out of a lawsuit and this is what I call a generous package so the law allows settlements to be done and when they are done they are good in fact if we were supposed to proceed to go ahead and Sue this is our law firm that was gonna do that job on our fees and everything there's no fee to it because you use our own resources and do all of that it could take quite a long time and in the end how much may you have got any V even if you got twenty thousand you as equivalent that would be quite a bit and how much will that you know even do after a long time so please what she has gotten is I can see we're not in your qualification far more than what she would have gotten if she had mounted a civil suit thank you very much that's good education for you take it the criminal process will go on nonetheless okay so my guests are here beneficent is managing editor of The Daily Dispatch newspaper I checked and it does appear that you haven't been no news file as an industry do for almost a decade that's a long time you guys used to run the show to admiration because it used to be an editors forum so to speak here right so how does he feel I mean coming back into studio ever I've interviewed you a couple of times though it makes you feel that look was no once you've done it before it's always good to go back on it nice idea okay also here in the studio it's Paul I don't watch ray his host good evening Ghana and has been a news reporter for a very long time he's unapologetic about his views very strong views he has to share always Paul thank you for joining us thank you thank you so much particularly hug get to see Ben Epson I'm not seeing him in a very long time okay and that's a reporter he was of great help to me every night then our Czech stories with him do you still up with office in Leblon event yeah okay I used to go there on a daily basis I will resume my history of it's been and here also is Evans Mensa he's editor enjoy news I've been doing this job for quite a long while Evans welcome to the show doctor thank you very much what two weeks ago is it you're here right where I'm sitting yes I was somewhere enjoying you right great okay so we will be going on the phone line to be speaking to a financial consultants who has different and new perspectives revealing about the banking crisis Emmanuel Akram is a financial consultant he will join us on the phone as we deal with the issues of finance on skype as we deal with the issues on the financial situation with the financial institutions in the country as the to collapse long before and then now five of them have been collapsed brought into what is called the consolidated bank consolidated bank Ghana will ask a couple of questions and also look at comparative analysis what are something elsewhere and whether or not Ghana is actually doing the right thing the thumbs up that the Bank of Ghana is receiving is it really is it genuine or it is not they say that they there was no any other option this was the only option allowed by law that they could take and they right or they're wrong will answer those questions in the next few minutes now let's get to listen to the governor of the Bank of Ghana who is now being a judge by some persons like is uncommon others as the man of the year quality review of bugs conducted by the bulk of Ghana in 2015 and updated in 2016 identified a few indigenous banks as vulnerable with inadequate capital high levels of non-performing lords and weak corporate governance in August 2016 the bank closed two of those box this is the UT bank and capital bank and approved the acquisition by GCB bank of some of their assets and liabilities under a purchase and assumption agreement other ones that were more recently licensed in 2016 and also commencing operations in 2017 also began showing signs of distress due to existing vulnerabilities that were not disclosed at the time of the a licensee efforts by these bonds to educate themselves from financial difficulty have not borne fruit the situation has rather waysand for these banks page bank at construction park where each granted provisional licenses in 2016 and launched in 2017 subsequent investigations conducted by the bank of Garland revealed that similar to the case of sovereign back both banks obtained their banking licenses under false pretences you see suspicious and non-existent capital which has resulted in a situation in which the reported capital is in assessable to them for their operations in the case of Sovereign Bank Limited as part of Bank of grenades investigations into the failure of Capital Bank Limited currently in receivership it emerged that sovereign banks license was obtained by false pretenses through the use of suspicious and non-existent capital the bank is insolvent and unable to meet daily liquidity obligations falling due liquidity support granted so far to the bank amounts to 21 million asset very first July 2018 the bank has not been able to publish its audited accounts for December 2017 in violation of section 90 of act 9:30 in the case of Royal Bank an on-site examination conducted by the Bank of Ghana on 31st March 2018 revealed a number of irregularities its non-performing loans constituted seventy eight point eight percent of loans granted owing to poor credit risk and liquidity risk management controls a number of the Bands transactions totaling a hundred and sixty 1.9 million CDs were entered into with shareholders related and connected parties structured to circumvent single obligor limits concealed related party exposure limits and overstates the capital position of the bank for the purpose of complying with the capital adequacy requirement that they can say they can pursue within the court system or any other means that are lawfully allowed we would also be able to part on all the findings of our investigation so far to the appropriate state agency that mandated to investigate and to prosecute evening if if warranted so what we know is that there is a lot of a lot of wrongdoing on the part of individuals that that contributed to the collapse of these companies and we will not stop at we work in their licenses we would in stress we passed on to the appropriate courses what needs to be followed up through and we would be judgment you say yeah you are passing on these documents of investigations done so far when is this hand anova being done who are you hand them over to just appointed a receiver yesterday in the person of yes sir near mono Joe juice we are going to be working with them so that they can get you all the civil options and our civil law options available to them going the court and all of that they would also take steps to report to the appropriate quarters guided by you know the findings of all the reports we have so far so that you know their corporate properties nc6 take up these matters when we're going to do that as possible there are certain players within the Banking Supervision departments of the Bank of Ghana who need to be examined and the bank has to do its internal review and clean out all the badness that were there you cannot issue a fraudulent license unless you collude with the bank of beer they the supervision Department in the central bank and those persons also have to be identified and prosecuted I'm going to ask the Minister of Finance and the governor of Bank of Ghana to appear before Parliament to give us better and fidelity less about this cell 5.7 billion and and if there's any way government of Ghana can take any action to reduce the fiscal cost to the state because 5.7 billion gonna cities isn't a smaller than okay Annette who had a chunk I mean the main customers the big-ticket we had talked about two hundred twenty two million we had road fund another 317 million we had Minister of Finance themselves so from what I read government of Ghana and its allied agencies put together you are talking about a billion is that or or they are more right so the discussion already started in the studio and where you have not been privy to you get to hear what have been expressed already behind closed doors later I hope now we will straight away go to the phone lines you you had the governor of the Bank of Ghana you had also the deputy governor on you know potential prosecutions you had Sidney Casely effort on the need for prosecutions and including to extend to officials of the Bank of Ghana and that you had case a lots of forcing to spoke on the summoning the Bank of Ghana boss and Finance Minister over the development k enforcing is a minority spokesperson on on finance and former Deputy Minister of Finance now let's get straight to the phone lines and speak to Emanuel ekron who is a financial consultant he is offering here in the country and also in Canada as well good morning Emanuel and thank you very much for joining us okay I can hear his speaking but I can't I can't I hear his lips moving in the in the in the Skype but we can't see anything right hello Iman Oh let's try again yes yes you're on now you're on now good morning right now I like us to plunge straight into looking at the issues from a setting broader perspective the Bank of Ghana among goddess other things said that the Bank of Ghana has since requested the bank shareholders to recapitalize it to the minimum capital required are making quotation in respect of one of the banks the Bank of Ghana has since written requested the banks share who this shareholder to recapitalize it to the minimum capital required at the time of it licensing while the shareholder submitted plans to the Bank of Ghana these plans have not yielded any success now they said is in respect of one of the banks then you find that this is almost the situation with almost all the banks that they were giving opportunity as they were being they were getting capital and liquidity support to be able to fulfill the obligations as they fell due and yet things were getting bad according to the report that the Bank of Ghana received and the communication it has made to us now if it is the case that as we know they has submitted plans and the Bank of Ghana could assist them could those I mean those that essentially required liquidity to survive not be giving a bailout and monitored regulated to survival and growth as we may have seen in the in the Nigerian case where they did what they call the the project alpha initiative where the state supported eight banks that were collapsing to survive [Music] should I go ahead okay it doesn't appear that the Internet's connection is the best we may have to try and we could just get him straight on telephone so we may manage that instead if we could get him straight on telephone to see where the bank of ganic it clearly says that there was no other option left to it and this was the only option they had the question I'm asking is what they have done is it not essentially it bailout the Bank of Ghana says there were no other feasible options in line with the relevant law so my major question to start this discussion is is that really accurate what they have done is it does not amount to a bailout of sorts by recapitalizing the the the consolidated bank using and then taking the good assets and making sure that it's able to operate was that not possible with the banks that have been collapse or some of them at least by way of changing the management and shareholders for example and also you know continue in that direction yes since we don't we don't have a menorah on the line now may I start with Paul right there good morning 20 of us I'll come to that question because I think there's some evidence in their work that KPMG did in which they put out some options for the government and we are not too sure whether that form part of the consideration of the governor's press conference but after a governor's press conference I was particularly worried that happen so brilliantly expressed what what he wants to do and seem to be protecting the public in in the way that he presented himself he did not discuss a major question about the whole episode which is the relation of duty of the Bank of Ghana itself he did not mention it now because if he doesn't mention that he leaves us in the middle of the street well we don't know when this will recap when we don't know whether this will occur another time because he's not being able to tell us that these things or cared because the Bank of Ghana's special jurisdiction or the people who implement that went derelict in their duty and so we have put these mechanisms in place and these needs will happen again if you look at the law and that's what I want to steal the axe 930 which is the EM the banks specialized the posit taking act when Parliament passed the act in 2016 they said is section 2 that this act is elevated by the company's code and that's a very serious matter in any country what does that mean it says that where there is a conflict of inconsistency between the Companies Act 1963 at 1 7 9 and this act this act shall prevail that's thus that's a very serious matter so that the companies could that sort of regulates all companies is inferior to at 9:30 where they have a conflict so the the governor and the people who have the responsibility to implement this act must understand the relationship they have with the society and deal with it accordingly in fact in the section 3 of the of the Act it says in section 3 D that the Bank of Ghana shall have supervisory responsibilities and one of the things you're supposed to do is to develop appropriate consumer protection measures to ensure that the interest of clients of the banks and the specialized deposit-taking institutions are adequately protected that does thus an important aspect of the other of the of the law it doesn't appear that the governor in making the presentation about the things that happened said anything about what had happened at the bank if you look at other aspects of the law there section 6 points if you can create a state they're giving you speak to the questioning of this law its provisions being elevated over the company's law which is you know fast in time yes because what's the purpose of the preface is about the the purpose is about their fiduciary responsibility has been placed on these people the higher responsibility has been placed on those who implement at 9:30 because it has to do with money and has to do with people putting their money in a trusted system be back and therefore that the Parliament in this wisdom was thinking that let's elevate the standard even above the company law so that even where there's a conflict let this one prevail that what I think they didn't recognize or they have not recognized or they didn't express in that press conference by telling us how distance okay if you look at the Lord these things could not have occurred without a collusion from the bank there was pure clear leader election of past collisions a strong way so let me change it and say that there was the relation of duty doesn't obviously relation of duty if you look at section 9 what the bank has to do for instance that since this you check how they find out whether somebody promising that I have this money had it the bank the the Act says all of that how in detailed issues did you go to find out so they can't tell us for another somebody obtained their license by false pretences oh how did you find out and when you found out what did you do there's another aspect of the law that it is anything about and it's in such as 16 about the revocation of license okay I'm coming no let's go to session 16 you return to deal with it yes you have time to deal with the the matters in the manner you you wish to in a most exhaustive way Frank so don't worry at all except that just a small bit about the Parliament itself saying that this law is elevated testosterone I'm invited to buy by way of a natural order if a law is passed and one is latest in time its contents if the conflict it are not alone which is you know far remote in time the one that is later in time will overcome that one yes so they really need to express no but that's why they when they express that of course I mean the points are making this general right even though the Constitution has other ideas about it in terms of the Constitution being the supreme law of the land the reason why Parliament expressed that was to emphasize that because what you are talking about is common law okay yeah speaking of common law right yes look at you man thank you very much I can you hear me now yeah good morning good morning how are you good morning very good thank you very much and good morning to your listeners I'm happy to join your people this morning and hopefully we guys have enough time for me to I'm going to the issues main step-by-step we do I like to give a very comprehensive assessment of all this great we heard your question agree with me you initially you wanted to find out whether the way other options are set for course or detail of these banks or in other ways could they are seve these five banks instead of I mean revoking the alliances now your initial question that's right okay Cavalier me clearly okay that's fine so let me go up to them to each of them and our our Express also my general view about the actions taken so first of all I think the new Bank of our Canada think amended and I mean I won each I mean session 53 I mean since I you should only be given liquidity support to companies who have liquidity challenge but I solve it okay so to extend that any of those companies were insolvent I think you can't go to liquidity support so the names of uni Bank and Royal Bank you couldn't I mean have continued to keep them alive because secession 120 prayer or fighting at night reserved specifically that if a bank is so insolvent you should do this you should book your line so so there's no I mean I mean I know sometimes I mean something else but I think going steady by the letter of the law it means Banco cannot no option if you sister it was a clearly determined that you need Bank and Noel by a Big Bang where you solve it so okay that's my first pick on it so in fact you Lee bang oil Bank and Big Bang do I describe as deeply insolvent not just in salvation available hello yes I was saying that in fact uni Bank Royal Bank and big bank were described as deeply insolvent not just insolvent so yeah what you say I'm saying that they are beyond rescue rebound you couldn't go to give them life support using liquid liquid because the liquidity support in accordance with 3053 says you can't give it to solve em back so I mean the only way out is to go to confession 1/2 in the tray of at night in there oh and put them into more we called a liquidation a tip in put under I have a different stick on a construction bank and so vein bank so if you clearly read sub em Bank a and M Construction Bank arm they were not really I mean insolvent I mean technically or Bank of Ghana is saying is that petitioners or known as Western capital was submitted for those two for me looking at the business model of those two banks I in my personal opinion they should have been kept alive Bank of Ghana exercising it right under the pads could have I mean in my view given another shell and luckily the Ministry of an asset I mean later a criteria that if you are solvent well-run bank you could come to me for four hundred million so I don't understand why they could be reading give a servant Bank and construction bank the option to access four hundred million from the Ministry of Finance and kick out to the shareholders okay are you are you taking notes are you taking your dad I taking note is it royal and suffering are you adding construction bank as well no no no okay because construction bank was a Redmond of winding up peso for special for I said that unit Bank a Royal Bank are insolvent those should be liquidated okay more into the law okay I'm talking about construction bank and sylveon Bank they are not insolvent okay so what I'm suggesting is that those two banks should have kept being kept alive okay and you may go ahead and give them four hundred million each from like the capacity have four hundred million available so those that attention okay so that's why I was pointing out to you if you say the construction Bank for example was not insolvent and therefore could have gotten a rescue what do you make of the fact that construction bank itself I hope I'm not mixing up any facts was already winding up because winding up dead so you guys could up at new the news on that and and the reason given was the father I mean time was running out a shoulder couldn't amis unable to give the money for the four hundred okay I mean they have no option you the reason why he did this and the reason why just wide enough support my reason because if they couldn't pay all their liabilities okay from what they have they won't be winding up because I mean they're definitely I mean they won't have the answer to wind down okay so I think they were very confident they have the resources to wind it down okay all that they are trying to tell you that they don't have the four hundred million because to be a bank I mean effective September 11 2017 you need four hundred million and they had crispy enough to determine that it's 2018 so order they are trying to tell you that we don't have that much continuum okay and I'm so sure that I mean is I mean completed in this unique unit Bank ease and all that so the best thing we can do to protect the integrity of the of the other people there I mean that there which I know the word good people is to kind of go and wind down the company so in my view I think that productive steps I mean I mean to do the right and which means they were solve it I mean they had their resources to pay all your liabilities from I mean coming and get out of the way right I think we need to draw the distinction between the five bucks okay the three of them were insolvent I mean you have to apply the law two of them you could keep them alive and we get new shareholders into that all right and all and from there from the Bank of Darkness own from the Bank of Ghana's own perspective we need to emphasize that that three of them were said to be deeply insolvent not just in servant they'll see a degree of control man I keep on saying that we had no option Bhangarh has no option because if you read our carefully he said yes I even it's not even a one-year incident when you learnt it's better to be installed than in cities they can't close you down okay so I don't want to debate that right now just affects a lot right now see did you do that we don't have any option time to do what it did right those who SAT with me in Weehawken even discussed those actions though she was said to be deeply in solvent included the unit back there the information again as we have known is that unit bangs shareholders and management's and so forth had pledged that they were putting together resources that would be sufficient in not enough to keep them you know beyond the point of being described as insolvent would then have been prudent to allow them the space to do that honestly I think I agree with the Bank of gun action and I'm going to explain why you see I will go to each of the issues that his reasoning with regard to u dban so one of the tender Bank of Gannon has objective is to maintain the sanity of the system and to protection I mean depositors and financial stability okay let me be blunt here the actions of unit bank I'll describe in the report makes the shell there's a manager unfit to run the pack it's as simple as that okay so I don't honestly by the idea that you should allow them to put in any money okay I mean technically I mean and I let me deviate a little bit here there were people involved Capital Bank whoa cool behind some other banks and some other institution I found out very unfortunate those people should have been declared unfit to run any institution okay so I mean I'll go Federal Bank of Ghana said I mean those people shouldn't be allowed to handle any financial institution simple as that okay the street improper Teresita Bank organisation those guys don't fit to run any foreign language but I think if you permit me to kind of elaborate a little bit on unit back because I think I like your listeners to get a full perspective on this hotel because I feel that I think we have half of the reports of orders happen in the public and I don't think we're doing unit bankers they can see if they're justice enough or we do I feel they're kind of no equity is well settled year we only know part of the people who did this okay and I paraphrase this to your colleague event yesterday and I don't know where it was ad but what I started by saying walled up looked interested to Asian where you've seen a driver was kill somebody by crossing a red light you just what I report that the guy run to the Red Lion kill somebody you copy you you guys have to be I mean am i angry about a driver but what you guys don't know okay the blood products but we made public you guys is the fact that the driver in this case and cross the red light 11 times and it was at 11:00 time they tribal was just going through to catch up would and the policeman allows him to what you guys don't have is the fact that what rule did a policeman play in others okay in my personal opinion ninety percent of the situation we seen in unit banking Royal Bank can be led on the footsteps of Bank of Ghana and the auditors okay I only keep 10% to unit back okay I've experienced credit crisis in the US before I saw this and I know where these things come from okay it was clearly regulatory and auditors I mean it should happen yet okay giving human being chance okay knockout unit Bank you allowed you debug to assess liquidity fund for more than five times it's underway no pain okay and it taught her to 2.2 billion come on are you are you I mean you guys in this video are you going to do some movie alone five time the guys didn't pay yeah so I think Bangkok I mean this job rapport I think it's half of the story I mean I've experienced bands who in liquidity support in other places when they're in the regular I give you a key to support its Andrea guys to your office are your Clarence the people you appear in has to be deposited not giving loans okay so back home kinda when you get them don't suit point to you guys leave them to just use the to point to anyhow okay give you I mean anything impinge opportunity there among people to the route that I mean let me get a little bit posted in a Bible that there's nothing good in me as for when I want to do good parties in front of me he won't be naturally we I mean happy with the strength okay that's why we have the loss that's why the laws are supposed to work and in this case the people who are supposed to ensure that the right thing was done drop the ball my friend they drop the ball okay I mean in cheese you guys have something I'm whatever colors you to them there's no robbery that will happen or that an insider help okay there's nothing guys a beauty balm couldn't have done what they've done would have support from somebody in the Central Bank and the auditors okay let me do it a little bit and go back to the lines are sir if you look at capita you look at and beste you look at construction until bed how could all this will happen we are no coincidence okay knowledge system capita okay like your listener I me Paul was trying to illustrate all the things that I mean the at night I mean a session I of the at required would be what do divisions was made okay in all these cases so I mean in summary I think what are I'm told people is that what you guys have in the public domain is half of the story and I take his 10% of what all the situation ninety percent of what causes it which you guys don't know and that's why I often encourage I'm encouraging the Ministry of Finance and the parametric Select Committee on panel to set up an independent board okay independent consultant or auditor to look into this situation from the end-to-end okay so that distance kind of happen again okay I experience distance in the US and other places what happened was that you can't even eat that I'm the back of guys conflict area these kids you can't rely on Capitol report and Charlie alone to make a conclusion you need on any pin analysis but what happened and you guys don't have that okay okay unfortunate and it should be on air to explain all the end to end okay easy to point figures okay that the guy who runs through the red light and kill somebody but what you guys don't have is the embedded that touch that the policeman played in allowing this guy to run through the red light nine times nine times 1/9 times right now go to Bank of kind of financial statement right 2017 they have four point seven billion okay they gave loans to banks for almost eight point six billion it does look like of that an amount is compared it doesn't look like there's a train to work with along they were supposed to collect collateral to be able to give this emergency fund the collateral they have for this four point seven billion is six hundred million though in in in fact probably the two point two that bill yonder is given to unit bank Banco can only have collateral six hundred million which is not just much in accordance with the law okay this issue little it created fund you got to support collateral so bank organizer was given money to unit back in not in accordance with the law if I'd to look at it for my face body this issue that this issue has been raised and if you look at what the Bank of Ghana spoke about for example uni Bank has said that it had a capital adequacy ratio of negative seventy four point six five percent compared to the regulatory minimum of ten percent now the question is did they where they involve where they managed as shareholders who according to the Bank of Ghana again have their assets significant portion of the asset locked up in interest-free loans and other advances to the shareholders and related parties questions are being raised as though there is a crime when you invest the money I'm using very ordinary Palin's understanding when you invest money that has come to you as as as an operator of a bank can you explain that to us what is wrong with receiving depositors funds and knowing that you want to invest it somewhere make more money and then pay them back when they fall do what is wrong with that okay so let me explain thanks for your question so I think this is very important I did you agree the valid issue here I think what people need to understand is that yet a lot of things are stick in your bank at this point they are tense Alcor bad banking practices yeah not unlawful the people should distinguish between what is bad bad banking practices what were unlawful activities in accordance with the law and what was clearly a fraud which will have to be determined by a low cost yes so people should be free man I would encourage people and your your your editors everybody to refrain from using the rest fraud it has to be established by a law court by intent of what depend okay we don't we've not reached there yet we only have or Bank of tonight saying so I think the first thing is that some of the actions of unit back or I mean from a bank am a banker from a banking standpoint doesn't make a business sense okay and some of them to know in accordance with at night reserves oh okay I think they were due processes that I mean going back to back part banking practices you don't lock your entire pants in some illiquid I mean money okay and and what they've done came is to lock a lot of the outer depositors money in liquid II was the name illiquid I mean like reality and all that okay move that those actions our or our court but but bad practices if you do that you've locked yourself up and eventually you are gonna have liquidity challenges right so so my final question to you liquidity challenges writing my final question to miss Eyre will be my final question to you will be to look at what's what what bigger plan will be in Nigeria for example we know that in 2008 they had a crisis in the banking sector they introduced the project alpha initiative to reform the banks we are told about how you know in 2004 they began to require to do consolidation program which was necessitated by the need to strengthen the banks the policy trusts were told at inception was to grow the banks and position them to play pivotal roles in driving development across the sectors of the economy as a result banks were consolidated through mergers and acquisitions raising the capital base from 2 billion naira to a minimum of 25 billion naira almost mimicking the situation we we seem to be mimicking their situation 150 to 400 now in Nigeria this what we are told happened now that reduced the number of the banks from 89 to 25 in 2005 and subsequently reducing the banks to 24 we are told that as we said the banks in Nigeria have created a formidable front so that now some of them can compete equally with some of the international banks that you speak about what do you see to be the broader plan do we have a blueprint in Ghana or we are doing an ad hoc you know situation of fire firefighting rescue I think I won't say a question in in a way that I mean as you Riley introduced me I'm a and I do frequently visit Ghana I consult for animal institution even I sometimes redirect liters and some of the banks and also the Ministry of and I'm privy to a lot of some information and some are not public and I would not want to go into it but let me first tell you that they are broader plans in place and unfortunately I don't know why things have not been made public women but I think behind the scenes there are broader pronounced that are being worked upon I mean without going to those broader plans - I mean at I would negate my non-disclosure agreement let me give you my perspective okay on what I think that we forward out yeah I do that briefly for I say yeah yeah yeah the way forward I think is first of all like I said initially is to establish an independent body to allow up to to understand what really went on okay not only with this five countries thing but with UT and capital backed by independent body what are you talking about come again by independent body what are you requiring so I'm talking about independent inquiry committee so some kind of Investigation not done no not carried out by bank of Denisov but but carried by independent audit now I mean or consultant I mean under the control of and Parliament a Minister of Finance to get an end to an understanding of waters led to offices which now we find ourselves in okay okay another fathom the campaign is to restructure our regulatory framework though as we speak now bank of Ghana has just two things that they are doing they are the monetary policy and a Prudential I saw strongly with all these things are happening that we need to go to the Australian model where Bank of Ghana focus or its monetary policy and we leave the Prudential to a separate body and bring in the insurance and I mean other regulatory under that body and carried independently and it would end up framework who have to set up a coordinating body like we have it s we're quite a financial stability committee to coordinate among these bodies to ensure that information is flowing effortlessly among the body and also to share a systemic risk issues okay so does I mean for me the heuristic the test take is to I mean have a group I mean a blueprint of a supervisory framework in Bangkok I see most of distances happening I think and I or hand is being used and my crew hand is being used I keep on telling people that work I mean I'm Nigerian may not be necessary a blueprint for us I mean I I don't subscribe to that Darrell at the model that we should be using I normally look up to countries like Kenya in Africa okay they have I mean you look up how King app developed in a financial service sector Rwanda is even going up and and also it in South Africa so I will look at those models okay less less not respect ourselves to much okay that also stifle I mean to Premiership and innovations okay humility is going on and I think what I think Bank of Ghana objective in line with I mean the the Bank of Ghana at it's not only what is doing they have also to promote economic stability and economic development so right some of these factions could he have done it earlier I mean what they've done I mean I mean historian I mean trust in the financial sector all those benchmark has to be people have to debate about it okay I feel strongly some of this action should have been taken by Elia and wouldn't have been in this situation because as I speak to you now is only local bands which are going to suffer in a beautiful dock at the moment people don't trust the financial sector I mean they don't trust what you are hearing okay so they are not taking their money and putting it on Adia I mean into a former look at a foreign bank we are putting them at their bed okay so I think I think some of these actions in my view I miss too late but it's a way forward but I think is the beginning we need more actions when you're an independent or it has board all right auditors right now in the country thank you nobody I mean some committee a conflicted in the way they are pendulum an electron will recommend an independent board to supervise the Auditor thank you so very much Manila Kron consultant and you had him Express very important views there including the way forward and looking at you know a sustained rudder plan and including looking for a commissioning of sorts to audit the situation so that we don't come back to these issues now I'll get to Paul to finish developing the point that he had started and the reference I made him an electron in idea when they did that reduce the banks their numbers they've now created matched a lot of their banks and now they have smaller number of bands from 80 80 plus now they have only about 20 something and we are told they they actually put a code for corporate governance it was issued by the bank a CEO of a bank for example was not to save more than or as it is now cannot save more than a maximum of 10 years see you cannot do that and corporate practices are being ensured now for you started from a perspective of a perspective that emond alacrán actually waded in and supported look into the bank itself you were cautious about using the word coalition but I still this is that the governor and his people must come out at this stage and apologize for what had happened I thought that would be the preamble to his statement because there has been something has okayed you have been derelict in your duty let me point that out quickly section 4 joined us thank you very much for joining as if you write news editor of the move him hoist yeah section 4 of the law says the Bank of Ghana me for the purpose of very fine now the law uses the word very fine the particular submitted under Section 2 which is to collect a license you want a license you submit particular that's what the law says the Bank of Ghana should do a interview a promoter a proposed director or key management personnel in the course of the verification and inspect the books records and premises intended for the use by the bank or specialized depositing institution says rather that a bank of Ghana may require that information supplied to the bank be verified certified or otherwise event heated in the monitor the bank me prescribed verified certified authenticated in the monitor the bank may prescribe it was dr. Allison who granted construction banks license did he do these days if he didn't do these things should be the preamble of his press conference to apologize to the people of Ghana haven't been given a responsibility upon an elevator at 9:30 you are supposed to verify certified authentic it when you come back tell us are they collected licensed by false pretences am I the one was supposed to check the false pretences Ted law says you should check it then or empowers you to do that verify certify off 10 tickets you didn't do it and then you took pictures with them when they were innovative construction bag and brought the whole government machine every day dr. Edison he was the one with a loss requirement two sources are you the one making the application or to be faithful and candid I'll come to that there again dereliction of duty I come so that our section 16 you feel it right on the head where the Bank of Ghana wants to limit let me show you section 9 that Paris is for a license just that one it says that the feasibility report submitted by the applicant under Section 7 is based on the Bank of Ghana will ensure that is based on sound analysis under reasonable assumptions that a proposed directors and key management personnel of the applicant are fit and proper persons the bank Organa is supposed to ensure that three stars see the significant shareholders are suitable and the ownership structure of the proposed bank or specialized deposit taking institution will not hinder effective supervision including supervision on a consolidated basis that a paid-up capital of the applicant is adequate and the original source of the capital are acceptable and does not include borrowed funds dr. Edison is supposed to ensure this and he comes to a press conference and say that they came they got a license by false pretenses and from are using apologize for it and he said they were using board funds and he doesn't apologize for it and he doesn't admit that there's been dereliction of duty on the part of the institution of Bank of Ghana and we are praising him we proceed in forma Mon expressing is not admitted no not me right the famous conference he was the focus of his fresco may should have been to tell us that the job that was given to the institution we are sorry we have not been able to do it the way we should have hands for this is the these are the mechanisms we are put in place to ensure that these things don't happen you don't come and finger point to other people we clap for you what is happening in Ghana this is the North Parliament passed he doesn't verify doesn't do anything he doesn't check the source for the funds and he comes and says that somebody came false pretences best faith in way has the party they see it as a bank in the bank will continue in its building the capacity and resources of our supervision Department to undertake a comprehensive review and improvement of all supervisory processes and ensure strong enforcement of Prudential and conduct regulatory requirement strengthen overall financial stability risk assessment and establish adequate measures to promote stability of the financial system he says quite a lot they can only see and only see distance he was like I was saying my question then is are you saying that if these were not detected from this from the start and they are detected later on they should not take action yes so brilliantly he's about to see these matters if he was not the one because you see we have to distinguish between the institution of the Bank of Ghana and the personalities who run it periodically not be the same person running periodically so dr. Anderson is able to say these things if he was not the one who granted some of the licenses but in the case of contracept it was him so what is his training he can talk about unit bank and the alliances but in the case of construction but it was him dr. Addison univer have some problem with like who granted the provisional license who also granted the the substantial license and comes back and says your district it was you if you can say that well we are sorry about this with the Bank of Ghana was not properly regulated or some divisions were no vacant since we took over we have put that in place and these days were not happening but it was you say sorry should be sufficient then the the other managers invited she'd also be saying sorry let's move on just so easy because the taxes responsibility is given by the people of Ghana you need banks responsibilities not given by the people of Ghana they set up a bank so they go to an institution that has taken the social contract and the hopes to establish that kind of regulatory thing for us the people of Ghana so I don't worry about the errors of when you point at me and you say and the hops you are speaking to the people not me hopes to say is a philosopher and he protrude the social contract many years ago and that's what basically governments operate on that the people of Ghana did their part to a certain group of people to exercise it on our behalf potentially according to the laws of Parliament that's really the point so I'm not worried about uni back and that's what they are consultants with a cross see the 10% of the matters in about 90% in the back of Ghana that's what he said forget about Bangkok analysts for our construction bank let's talk about forget about Hindi ban let's talk about construction ban and the rule of dr. Addison visibie at 9:30 what did he do admit that she has give me the power to very final twenty kids you don't do it you derail it on your duty you come and hold a press conference and want to write a high horse verify authenticate there were three because 16 which really gives dr. Addison the power to do what he did in terms of revocation of niacin at 9:30 said that the bank may revoke a license under section 12 whereby the bank of Ghana is satisfied that an applicant provided false misleading inaccurate information in connection with the application for alliances or suppressed material information that a bank of Ghana is able to do blah blah blah blah okay says that so you see that the law actually anticipated yes the law become the and the whale with false information salutely and that's subsequently you could find them out and when you will get another law prescribes how you should do it I'm coming to it there again he faulted because I've checked ok he's supposed to give them 30 days notice this is the law he's supposed to write to them that I want to revoke your license and keep them days notice did he do that you know that this won't happen oh I have checked it didn't happen as far as you know cause cause I didn't happen ok let's let's read it okay go ahead 930 16 3 where the bank proposes to revoke the license of a bank or specialized deposit-taking institutions under section 1 the I shall give notice in writing to the bank or specialized the post institution specified the proposed action and the grounds on which the action is proposed to be taken give the bank or specialized depository institution an opportunity to make a written statement within 30 days 3-0 did he do that there's a permutation in the graphical yesterday he did it it should have other invocations if it should have fun part of his press conference in terms of telling us the procedure because he doesn't act on his own law he act on the loss of the people of Ghana as given by Parliament so this is the part of the law that allows you to do what you can do so this should have also formed the pre apple of his press conference and you are clearly aware how these things can happen is here suggesting that if these parties went to court on the basis of non-compliance with the act seeking the review you know powers of the court they would throw out what they have done I don't know I'm not I can see you have pointed out the care body in what Parliament said or Titus's should do what I can say is that dr. Dyson when he came to give his press conference should have stated the base of the press conference and say that what I'm about to do allow it's allowed in section 16 of ignited see that's what he should have said now the section 60 of Agnetha says write to them let them respond in tahitian I've said that we wrote to them on okay so so and so 30 days has elapsed and so here I am to announce the revocation of the license we are no suspect he does a gross violation of the law and almost a violation of the rights of the peasants whose license has revoked and who and now probably in the case where their names have been bastardized I mean when I read this I was totally shocked how can Bank of Ghana you have so many lawyers they could have hired you as a lawyer did we do you come expensive and existing sort of dr. Addison because we are talking about banks that existed before him the the line scenes for beige and all were issued ahead of his coming understand all that but I'm talking about construction but you see to the extent that he was there on construction ban he should have a better is mine to it I think and also told the press that is it my whole issue about this old man is they see construction but let's not miss this JC de Lacey Falls presentations no Construction Bank and Sovereign Bank big the the made false representation false pretences that's what he means but you know the construction Bank was already going into winding up explains that you agreeing into winding up because they had difficulties raising the minimum capital of has nothing to do with my issue my issue is the granting of the licenses which was not done in according to at 9:30 number one and the revocation was also not done according to at 9:30 number two and these things dr. Addison has a nominal figure of that Bank of Ghana should have been telling the press when he set out to say I have revoked line and what power have you booked the licenses this press conference did he mention section 60 nobody should I be should have been there that this is the reason why I'm revoking the licenses and these are the tests that have happened this is section 16 three it says how the license should be revoked that CDs write to them did any of these things happen you don't just come to a press conference at revoke licenses and my concern is I would call him a hero I mean the police come and say 450 when you hold on something is the footing when well did I need us to clarify this issue and and then I'll come to you I needed to clarify this you speak about 30 days notice violation I don't speak about the law says it right because you point us to that do you take the view that the period under which the universe for example was on the administration he could not be considered as a period within which there was potential every vocation because they are stated that we are supposed to be be under administration for not later than 90 days yes we didn't wait to consider what also so you are saying that we should consider the appointment of an administrator as a written notice under the law the law says specified the proposed accesses or give notice in writing this is the law this is the fidelity to the law the bastardization of the Lord the ignorant of the law this is what I'm worried about by Nelson go to prison for further not to be established in Ghana and this is give notice in writing to the bank didn't see a point of a side miss Rita it says specify that proposed access specified the proposed action and grounds on which the action is proposed to be taken give the bank a special order special edible institution an opportunity to make a written representation within 30 days of the service of the notice this was not compliant with that construction bank was this setup was it in line since in 2017 the fact of the matter no other lines is in the face of the matter of construction bank no I need the toy a brother I'm telling the firstly the matter is that dr. Basu was the who presided over the provisional and over the substantial facts of the matter check should tell us okay I'm going to do just wants me to end yes you will you will on this point you want under loaded on this point on the law okay finish then we take a break we come back then I hear from Ben Evans and a fear so so this round his position what Addison I'm asking questions yes I knew the governor okay the debit and credit of the institution he filled the debit and credit of the institution to I have a position on essence whose houses are demolished because I own waterways I've always felt that the person who gave the license for the permission for the house to be built totally prosecuted whoever come to you that's something I want Commission to build on this piece offline and you give me the permission I'll lose by my husband demolished by he must not go free Ossipon cabana must not belong with Paul on that matter you the ones in the respect of the land to build you also have a responsibility to do your due diligence so if you didn't do it you should not go and blame the one who you will agree that bed rambled you should go free hello I can wrap up that okay yeah two minutes to wrap up so yes so on the basis of everything that ignited he proposed that the Bank of Ghana children there's been the relation of this with that Bank of Ghana must apologize and I'd met upon and there's also dr. Edison's own responsibilities in relations one of the banks and they must come and explain whether in the revocation of Lance's they have complied with the law because as it says it looks like they have not complied with the law we the people are gonna need some confidence we don't want dr. reason to hold a press conference for months and I said to other banks have gone down some of the statements that were made for instance that banks had uber stated get the postage funds and the Bank of Ghana was not aware of it I mean how should we go on how should we go on in life in Ghana when the back of Ghana with a regulator is not able to finds out - three years later that some people had overstated that the post has funds this problem should be squarely laid at the Bank of Ghana it is only in respect of uni bank that it is KPMG that was assisted the Bank of Ghana to know the true state of affairs that's reported yes but with the rest of the banks it is the Bank of Ghana's work on-site visits to do all of these things and investigations even if is one bang in the bank has 400,000 customers so even if it's uni Bunch and only it's still a problem you saw the statement that was put about that none other and by the way I also congratulate him I know him very good guy that's the way that I saw it on the joy page he said that we have enough deposits why should he be telling us that he's telling us that because people are not sure under the new money the new managers congratulations to him now because the Thomas is not able to tell us that distance have happened we have put X Y Z in please it will not happen again when the police find reports hundred armed robberies in a showman dick or in banks or wherever the comments at 100 I'm roba sorry report said this how the robbers committed a robbery this is a kind of thing to use what we will tell the public is that next time when you are driving here do this when you are doing that do this to give some confidence you don't come a report such a humongous problem to the people of Ghana and you don't tell us how on what basis we should have the confidence that this this will recur and we should clap for him that's what shocks me for saving depositors funds for participating in the depositors funds not being guaranteed by granting licenses without making obeisance to our night 80 the governor of the Bank of Ghana you've got licenses without the gas they are sending in reports they are supposed to sent in the Bank of Ghana and those reports do not reflect what is actually on their books you should know immediately so don't tell us that now we are put on automated system in place every day a bank reports immediately we can check that's what we need to know and then if you are invoking licences you have to consider the rights of people the Parliament in his wisdom in success system put there I don't just revoke it if the law says you should write to them you should write to them you cannot violate their law in this circumstance how many years have we come from for that problem yes I don't briefly just sort of briefly the managers of the central bank have been listening to us and we're joined on the line by LC RG thank you very much for joining us now Paul and even a mr. Iman alacrán who is a financial analyst whom you may be very familiar with are very clear together with others we have heard from Sydney Casilla here Ford we had heard from other people who suggest that clearly the Bank of Ghana ought to be telling us exactly how these infractions happened under their watch what do you see good morning good morning I like to say good morning to your panelists as well as your listeners so I have I have intervened in this program not to join the general discussion but I felt it was imperative for me to join to clarify a couple of issues that have come up in the last few interventions we're grateful you do sure number one it is absolutely important that as we speak on these matters we ensure that we are actually helping to educate the public with correct facts and law and we should not be doing this in a way that confuses the public you know panelist Paul was fed to several sections of some sections of Acts 9:30 and in the process created impression that the Bank of Ghana may have done something unlawful and I think that's rather unfortunate the Bank of Ghana wouldn't do anything unlawful the Bank of Ghana wouldn't take these extreme measures which I'm very difficult to take without having to regard to what the law require back okay so you as a second deputy governor you would clearly know so can you answer him directly yes did you follow the law in providing 30 days notice before revocation if you look at the press conferences we issued we said that three of the banks for the banks were deeply insolvent and we went ahead to list what basis for that assertion was now if you look at by at 9:30 we absolutely have the legal power to revoke your license instantly under Section 123 of the Act there is no notice requirement when a bank has reached a trigger point of insolvency you immediate it's actually too late in the day but the law haven't found that out you immediately revoke the license you will not wait under 123 and we say that in a press conference and we did what was required and fire by the law such a 16 comes in to say that when you have found under false pretences that it's a bank of obtained its license you can go ahead and revoke their license under Section 16 and then you go back to 123 to say which also say that one sub license has been revoked you appoint a receiver why 61 section 16 has a due process requirement you call you you write a notice to them and exoteric now the Bank of Canada has on several occasions the top management of the bank of Ghana has sucked with the chairman the Chairman the board the shareholders of the of the bank and explain to them what our findings are giving them opportunity to correct the findings that we put before them each of those meetings were memorialized were documented and sent back to these institutions so they're the written records of these engagements nevertheless section 16 and I'm very surprised that your panelists did not pay attention to that section 16 years as opposed to say when at some point you find that it is also being messaged to rebook that licensed things on you know what grounds have been established including having obtained the license by false pretences you are entitled to revoke that license if you sell you feel that it is an emergency situation and the safety of of the financial system is at stake the safety of deposit is a safe we are within our power to revoke their license you know don't never mind that we've even given them ample opportunity to do that at which point I would say well you know we are put your notice that at that point we have power to act an emergency it would be extremely irresponsible of them or to say that a financial regulator is always required to give 30-day notice because if you know anything about financial stability you know that that can go down in a split second hmm so every responsible law that's well designed it's going to give you that power to do that okay so as long as you have some ground to do it alright and so we it is very unfortunate that someone's with their the crate impression that we did not know what we're doing and I think that should be dispelled immediately but but you will agree you'll agree that you will agree the poll is asking legitimate questions because if if you were found in your statement not to have addressed an issue and he raises that is legitimate and it's assist you also to further assess the public to completely appreciate what is going on well let's do it well all right okay again I'm not on the panel so please allow me to intervene and you can ask first things and then I'll be off I'm due for another appointment okay great issue about dr. Edison having issued a license to construction that's also a bit away the process of due diligence on the banking license application is done prior to the issuance of a provisional license the provisional license in the case of the three beds Bahrain they and construction were issued in 2016 long before the tribesman was appointed okay you gave Thank You Shan a provisional license saying we have done as you imagine we have checked your records and everything you brought before us and we're satisfied that you can operate as a bank we give you a provisional license we tell you to go and it is the provisional license the subject perhaps to ABC conditions you must meet before a final license of issue to you okay normally for six months at the end of that period the Bank of Canada tells you well given the fact that you have met XYZ condition which we we we imposed on you and that becomes the provisional license at this point you have met those requirements and therefore here's your license okay so that's really what happened so the due diligence would have been made at the time of the issuance or prior to the issuance or the copy the permission of regional alliances and then you're given the right to start on a provisional basis subjects and meeting specified conditions so that process what took place in 2016 yes you used to talk about how he went to launches an exercise well yeah I mean that was last year he went to launch it but then licensed the you know the course and part of the licensing process had taken part try to his position offers so again that's an unnecessary confusion and it really doesn't it doesn't help a discussion going forward so so it is factual that the governor now supervised or that the final license was issued under his watch correct but I have just explained to you that the time on licence is issued it's almost predicated upon the fact that we have given you if we do not mind your application you don't even get a provisional license but we give you a provisional license subject to you meets and specified conditions once you have met those specified conditions unless another due diligence are taking place to show that your original documents were not good it is normally a matter of course at that point that it does drop that the law says that within six months after you have obtained you you have been launched and started operation on the final basis the bank organic um in and do another audit and make sure that anything you said wasn't placed okay I depend then started that process of saying well you know you've got your final license on this day because you have met the specified conditions that were imposed under your okay if I might ask and gets very quick responses to brief so that you can also go away my point okay is a very plain fourteen in there to go and check to make sure that they are within the law after six months of certain operations they are really doing what we want them to do any fact that their licensing was done properly and then that's how we found all of these things so it is very important to put things in context and we have said we are not trying to shoot anybody we have said that part of this whole trend that emerged of fake capital of poor cabin and forest management in the bank inside the dealings and all of that what because the permission was weak we have said that ample time so carbon absorbs ever a press conferences and all of that and we are saying that we are instituting several measures to make sure that we never ever get back to the page materials do I sorry but I appreciate you as planishing but I want to carry my audience everybody along with you is it not curious though that you do not have only one bank that receives the you know final certification from the current governor actually it for beige was issued in June 2017 correct yes so yeah so - so the side of that comes in in April he takes office respectively in aleyko and then they've already to provisional licenses that have been issued subject to condition but conditions are met Banking Supervision Department advises that these conditions are being met everything is fine you know like mint officiate now in two months he will not have conducted the diligence when he assumed up with a governor in two months what you're saying you're talking what you're saying what you're saying is that what you're saying is that for example as related to beige which receive its license in June 2017 construction bank all of these he he supervised sort of you are saying under his watch let me use those expression it happened under his what you're saying that for all of these at that material moment as as a June 2017 these claims of false whatever were not known they have only become known to the bank later after the final sets keys were issued the bank the bank has been under new management I mean the governor would let me be more specific was appointed in April last year okay when you're a few more face Jasna you're not going to get into the operational details of a department they want okay you have before you in June like provisional licenses that were issued a year before and you have to make you know you have a recommendation to say well they were asked to meet these additional requirements they have met them and you on the strength of the recommendation of the director of the department who's under oath to do the right thing you know the final licenses issues the due diligence was done before them from the day before before the provisional licenses little issues from the date of the issuance of the provisional license you were monitoring your first from sanctions provision department is monitoring to ensure that they'll meet those additional conditions placed on us okay this is that you get a recommendation within two months or a month and have it okay I'm very sorry I'm very sorry but assist me to do this paragraph seven of your statement said that beige Bank and construction bank where each granted provisional licenses in 2016 yeah and launched in 2017 that after they had received the final certificate yeah now subsequent investigations conducted by the Bank of Ghana revealed that similar to the case of Sovereign Bank both banks obtained their banking licenses and the false pretenses through the use of suspicious and non-existent capital which has resulted in a situation where their reported capital in is inaccessible to them for their operation so you are saying that all of these matters could not have been detected before before the provisional is a correct at some point they get a provisional license you say okay we've checked the paw patrol their capital seems to be in place its invested it's showing that it's invested in Bank a or thank you on behalf of this river and final the face of it we founded a detention expect so you say well maybe you should also meet one two three other conditions but appear about your operation and by informational license and at some point they're going to give your final license so the final license is issued because we match those additional conditions at work then in six months after that we go in to check to make sure while you're operating well accorded your business well and everything incidentally then we begin to find as we dig deeper that at some point after you have a change in that you have a change your license your even a final license the money that was meant for the banker camera down hoped the morning of the first opinion investments in other places such as the cold bath by device is for its operation the don't ever seem to have access to the capital it's supposed to be with company X or investment house eggs why are you a person without sufficient capital because we license you on the basis that you have a capital say we are we fare tight and turns out that share have moved the money out of those investments so in fact those were followed song from the beginning ladies from other 16 shows lives of capital which have subsequently been worked out by shareholders dr. Addison then decides it's time to call these people to book so you call them in you help you make them explain to you what is going on what is happening to the capital based on nature but even within the traditional my friends in the first place so you have a lot to offer or to answer they go back and forth they bring this ultimate they bring that joseline you meet some unseen sides and then realize that the story doesn't add up and so you say the decision of some sort so documentation then begins to status process of uncovering what really went on where the license it'll be best and then having five we're not lazy to take actions have taken action well well from from from an ordinary mind without the sophistication that you bring to all of it it sounds that it's it's certainly a problem that within the period which should be as a probational period you you are unable to do what the law requires you to verify and authenticate setting things and all of these you know they slip through and then only after that then we are we're taking them on even though the law makes provision that as I suggested to Paul if they are not candid and if they are not frank from the start then you could be taking on I would want you if you if you don't mind to just quickly briefly tell us whether you have a grand plan going forward or you are actually acting ad hoc in these circumstances I refer to the Nigerian example of the alpha project alpha initiative I don't know if this is what the Bank of Ghana is up to using the minimum capital threshold to you know force measures as happening in Nigeria and so on and so forth so that a system is sanitized is there a blueprint very CG the blueprint and let me go back before I talk about a blueprint let me go something one of the alleles your panelists effect earlier on you've got to distinguish the institution from the leadership now we have been very clear that they were not used into position and that is an important part of the story we have not seen that that part of the story now then dr. Gleason seen a lot of changes are being made by the banks the banks that have been faulted in this second stanza five banks we are not dealing with them as institutions but we are dealing with the the shareholders the management as well so it is it is fair for people to make the suggestion that you don't only deal with the bank of Ghana as the institution but the human faces that make that institution as well well but well if you would listen to me that I'm saying so changes would have been made I mean the head of the relevant Department for example will move for better for more accountability okay there are new I don't want to go into details but there's a lot of changes that have taken place that have taken place precisely because we recognize that face there were Nazis in the past and we need to strengthen even the face of the bank so we have made a lot of changes in that with that and we take with very little infusion that we all work for so in the end we're responsible for the failings of that decision whether or not we're there at the time or not so we're saying that we the new leadership practice sided to take action so it's amazing nobody's talking about that you know since last yeah we have a center August last year and see consistent action for enforcement of the law right enforcement and doing what the law requires us to do and we have not realized on that why it wasn't done before that's an entirely different story but let's hop confident in the fact that going forward will come attached to a course in the law well not just that okay enforcement you provide it and I'm going to get into the blueprint matter now yeah we we have customization for the banking system in our engagement to the sector we have been very clear about the fact that we are all things you do what is right you you guys enough now we have seconds makes a few of you regulations director director bank for some people talked about a minimum capital increase that's one way of ensuring that we have really well capitalized on doing business and taking care of people's money number two is the fact that we're moving into what we call the basket two and three capital framework which is a more robust and more transparent way of arriving at the bank capital so we're doing that as well the implementation of traffic we're also saying that the way in which you account for your bad loss including loans that have been taken by shareholders and directors and managers you have no intention of pain the way you consummate that has changed we're going international IFRS 9 it's a more transparent system we all know very early on whether those laws are going to be paid back or not and how that would impact your capital the public would know by doing that we introduced a copy governance directive very clearly spelling out a situation of the boards of these infusions and and Austria manages and all of that right it does appear you have a lot more work to do because if significant significant stakeholders like 'man are Ekron is unaware of the blueprint then that's not good enough you would have a lot of work to do that but but he makes a suggestion about some of the banks that you don't exactly say insolvent and therefore could have benefited from the bailouts that you have used to set up the construction the consolidated bank what do you say about that view well as far as he's concerned banks like construction bank banks like is it the Royal Bank so that's untrue I mean the Royal Bank is baby is you know it's happy to issue is negative we see percent or something like that when the lower classes you have a positive number okay so we try to insulted construction was on the moment I was operating at one third of the minimum capital of 150 million one said the law says that you need a minimum of one 280 million in fact at the point of my sensibility of society because of the of the Formica LCD on the second circuit's surrounded house happy fellows were here and effect they were operating with only 40 million down rct-31 said of the minimum capital and they could not be allowed to continue we have given them even back absol time to make it up and that was a lesson and if they help customer deposit ok they were part of the claret system alright it was part of the entire financial system their soldiers that other bands wait okay so we needed to take that action that's not true but we wouldn't take these actions like I have to assess of course these are things that caught our weakness lines for months oh we get seas are baby weighty things okay thank you thank you thank you thank you thank you very much elseif second deputy governor of the Bank of Ghana unfortunate though that you are so busy you can take a couple of questions from my colleagues in the studio that would have been very nice but thank you very much for your intervention okay so um Paul in two minutes you were disagreeing as he he he she sought to she sought to point you out to a number of things yes so just at you that there could be an emergency provision that does not require them to have seen that to give a 30 day no notice fair enough let me start a nice note I think that the second part of your interview with her was good she is giving us in some hopeful that something is happening and that does that's important I also think that everything she said about the law is not correct and I'm going to point that out so she identifies in addition to section 16 section 1 2 3 which gives the Bank of Ghana the power to revoke licenses now she says that under Section 1 2 3 where the bank is insolvent we can immediately revoke the licenses without complying with a 30 days regulation that 16 prescribes and then under 16 they have to do that okay so let me come to the point there were five banks whose licenses they revoked and they give reasons for a vocation of these licenses so some way insolvent they talked about uni Bank etc fall under 1 2 3 I'll come to 1 2 3 those they said did not made false pretences is clearly false under 16 it is under 16 when you want to revoke and that false pretense it is 16 it says he a 16 1 the Bank of Ghana may revoke licenses issued under section 12 where the Bank of Ghana is satisfied that an applicant provided false misleading or inaccurate information and this what Addison said about construction Bank in that regard you have to comply with a 10 cedis of section 16 there's no other way you have to comply oq in the case of construction back and sovereign bank they had violated 16 if they didn't send the test again notice now in the case of the 1 2 3 - she cites where and I solvency you are able to revoke the licences success 7 which is the last one of 1 2 3 says that the Bank of Ghana shall notify this is - she's rather see that it is it says notified did they notify uni bank that they were going to book they didn't ok so they violated what 1 2 3 and 16 everything she has to get it clearly officials must get this matically thank you she goes right wrong then lost rights right so Evans she spoke I had you also shaking your head and and and and suggesting to me that there's some bit of inaccuracies at some point I mean I thought and actually that is you think that until we shift the blame onto the bank of Ghana we are not going to solve the problem to the banking sector really that's my position because as we all know as human demons as we are we are fallible if you leave us to our to our own powers would violate the law that is why we have the police service to check us at the traffic light if you leave me and I'm busy and I'm rushing here to come in view on the show the news file I'll run the red light that is why the policeman must be there to check and in countries were they know that you'll be caught when you get to the red light no matter how busy you are you stop if you don't want to run the red light you leave home early because you know you'll be caught because the individual is responsible for the collapse of these banks no they will not be caught they do what they do and until we shift the blame onto the bank of Ghana we want to fix the problem and that is why I was shaking my head I was shaking my head because I had the deputy make the point almost to say that between the six months when the provisional license is issued and the substantive license the Bank of Ghana has no other responsibilities other than simply looking at they have infrastructure looking at the faces and because the provisional license requirements have been met it's almost a serious automatic that you know the substantive license would be granted and then post the substantive license then you go in to looking at their whether they the document you had provided for the provisional license were was we're done legally and without you know false pretenses appreciate her explanations but they do not negate your concerns no I have concerns so because I think that whoever framed that law and gave a provisional license and then is substantive license thought that within the six months you do proper due diligence to be sure that the basis for which it granted provisional license is sound before you go ahead and grant the substantive license already look verifier to meet it the other way there are three activity certified you know so for me that is where my problem is I mean having said that though and he says that we need to separate an institution from the individual I agree and so we we still need to make the point taking our own point and separating issues from the individual the institution of the Bank of Ghana failed the depositors fundamentally fill this country because remember that a five point six seven billion we've taken to build them out you pay no the questions of corporate governance making sure that the persons who are going to run the bank that you issue the license transfer the proper fit and proper yeah how are they supposed to be be so so a short yeah that they would not do anything wrong can you imagine that no I I get the point that the club will only allow all their certificate no matter how strange and the achievement yeah people might beat the system that I understand the understan but not when you've told me that the guys were borrowing money to show you when the money was actually not there something that you had six months to verify so I mean assuming that the time that he presented these documents to get a publisher license I'm talking about the Bank of Ghana as an institution no mr. Addison at the time that we presented these documents to get the provisional license they had the documents that you'd now determine six or one year down the line that were we're fortunate to borrow that time if it's if it's we can use that in this time we're there and that even if you could indeterminate at the time you give the producer license you have six months to double check and see if that you could find that she says reading some persons within the supervision departments have been either removed or something no but but but yeah but it's an institution they see I'm going back to her own words separate the institution from the individuals so whether you suck that people or not it is the institution one a whole to account and you you could something that Miss Addison said about going forward what they want to do right and one of the things it says reviewing guidelines directives and regulations and industry and I'm thinking the first review now must be done it's at the Bank of Ghana itself I mean that's where we need to start this conversation he also said strictly enforce fits and proper guidelines and I'm like the fit and proper guidelines must rest apply to the guys at the bank of Ghana right now else he just informed you that they have a number of things they have issued including corporate governance issues and all of that yes it says the people by using layers you fix the fundamental problem in my view which is a problem at the but central bank and there you move forward and and I agree with Paul when he says that when he did a press conference from an institutional point of view yes I was disappointed but you need to first aim that we had made some errors the Bank of Ghana had made some and let me tell you why and I'm my my position really is from what I had on anaconda yesterday we brought in a gentleman who is a victim of the capital bang UT bang collapse right who says a year on he hasn't been paid as his severance package right he hasn't found the job and he represents the entire group two of his colleagues have passed them they are dead because of the stress attached to not having a job having a family and not being able to sort of cater for them and that in the last week more of their colleagues who were working for the GCB had been sacked and and I'm wondering and he says in the department in which he worked a capital back they were failing they are opposed to the Central Valley every month and he says that if the Bank of Ghana at that time were mindful to check what were failing they would have noticed the problem okay and fixed it before it got to where I got it right and then there's a second customer of the current the beach cottage feedback which has not gone under who I asked directly who do you blame for this he says a central bank right and these are for me the real faces of the crisis forget about the owners and directors and all that we've seen the owners and renters than the two banks that collapsed last year they are walking free right it's it's about the individuals who have deposits in the bank the woman like the woman you represented who was assaulted by the police officer those are the people for me when I think about what has happened the banking sector I have their faces in print in my on my mind and it's it's because of these individuals that I believe we need to get the Bank of Ghana to be afternoon yes I think the reason why and that's why I go support people are applauding that when you make an error it's better to it's better late than never right I think they have come to the realization that things have gone on in the past that simply isn't on so we are making amends so it's good to make amends but it's good in making amends so all that we made a mistake it's when you own that you make a mistake that you can find that proper solutions to deal with it final point on this is that there's a book I'm pretty sure that has been going around and people have been have been talking about it but I checked to see if it is really a book and I find that it really is a book which is that the best way to rob a bank is to own one it's a title of a book written by William black it's a fascinating piece because it's it actually took looks into a similar case that happen in the u.s. in the 80s and William was examining why it happened and it comes up with this URI called control fraud which essentially is that looting a company for personal profit in essence the CEO is a centrist from the company loot it for their personal profit and he makes the point that I think we need to pay attention to he says a reason why it happened in the US is because the regulator's when an active proactive and independent and there was political interference and my question is is the central bank truly independent it's there because I'm asking my question how come these licenses were issued in the past is it that the person who came to apply had big political links and therefore people ignored the obvious which is really what william found in the analysis he did in the u.s. now because there was that the central the regulators ignored the obvious and went ahead and issued licenses and close your eyes to the continuing violation of the law inferring mr. Lapointe that control fraud is an active and continuing activity in every financial sector which means currently as we speak of these five banks and to the collapse last year there are possibly more banks currently in existence in Ghana right now doing the same things my question is is the Bank of Ghana aware if they are are they taking pre-emptive measures so that we don't get to the point where a year down the line we are talking about two three more banks okay so you know what everyone's very interesting fascinating point you are making we will go for a break when we return we'll hear from with a pan am saying we are from a fear but don't terminate your points you will have to develop that point further and the point where you make about your major concern being the taxpayer having to fund to fund what appears to be you know something that has been done deliberately to enrich other people and we should also answer the question before 2016 the Bank of Ghana did it have teeth to bite because the law they are using presently was done in 2016 you are still here on news file especially dishing in this August with editors hosts and analysts we'll be right back to hear very fascinating views from beneficent Afiya pakua and also Evans will continue his point welcome back this is means finally so most authoritative news analysis show and I've got the Nelson I've got the fear poker I've got Pollard mortuary you had him quite extensively an Evans Mensa has a point that he will continue to develop and yet another leg of the point he feels that the taxpayer should not be burdened with the inefficiencies and the sort of cotton code the fraud of officials and private individuals now then I don't know where you take it from but the tea you see has issued a statement doctor it's it's a secretary general right it is issued a statement and they applauded the Bank of Ghana like many people have done including the financial expects except that as people applaud or the extracts are flawed they also have questions to ask like you guys are doing this morning but that you see applaud them and seem to suggest that they have trust that the assurance of depositors funds not being affected is sacred and number two the assurance of there will not be job losses it's also you know cast in stone do you feel that you see probably is not it's not properly appreciating the situation particularly in respect of job losses the gun schedule catobar soda Libby you know how a person would die yes you know how a person would dance by the way to sit in the chest ask us if u T and capital banks people lost their jobs like even say yeah two bucks a total it and read so far right yes yes and even those that are still being held by the GCB because they took that they did the patches and acquisition they have been on probation and the probation is being renewed after a probation nearly eight thousand five banks if three thousand lose their job it will not be out of place I believe that you know in a sure depositors of their monies we need to also look at a job losses now there are five banks that are not consolidated so if you didn't reduce of about half a mile there is Union Bank there is capital and then there is less the sovereign how do we do I believe those are greater numbers are you able to start with and then yes so what would we do I believe that yes the monoghan has done well but the issue of trying to separate who was there before if for example today the IMF where Elsa came from sister look the bank of gonna help be fantastic let's give the management a million dollars bonus tick and drop will lc1 build approval governor to take it I sense her anger a bit of frustration I wouldn't put it to benefit the institution the city you know I think the voices come from I understand the different cultures of pretty Nene she's rotten IMF when I Bank of Ghana you are doing well mother would take the bloody before and we just swallowed to some more time your mother swallow it you know I think that it's a good idea and I believe that there might be a bit more proactive like have a system of maybe every six month Publishing what define are wrong in people's banks now if the bank knew that video will be a publication open but that they should go into nitty gritties and you know that if this year there's a flag that your issue is going down there'll be a mass withdrawal they will run on the bank be careful hang with me if those people to give you what well we've come from so they will be they will be doing that but privately not publicly my savings culture is very bad and you don't want to drive away you see the privately thing is what has come to now goes from what us who were saying they had the one in size once and the past yen half to forget they are working with law yes now I'm sure the law will see that if you see something going wrong that people are throwing stones you go there hits your head I have my privacy no no no no the law is there but you must be the must be a limit as to how you can intrude into a business in terms of but if the bank no don't that aren't extra five they know that if there's a flood the Bank of Ghana is like leeches are the following banks have been issued or social so they'll be running but you suck yourself because they bill wand about people wanting their monies and put it in a bank that has global flux raised beyond the blame game that we are elevating quite say focusing on a lot more what should be happening let you see the fire bar for example says that it is important that the activities that have led to the collapse of these banks and necessary that what is perhaps the biggest bank bailouts in Ghana's history must be properly investigated and those culpable punished in accordance with the laws of the land I think that we need to set examples if they help improve that as a CCA that there may have been collusion of science day has seen people should be punished I believe that if the government decided that look were given this we've taken not their license we given it then the Stannis might be six no those that UT bark if there is were for deliberate attempt to read the posters money might be some sanctions other than that going forward there should be something that the public will see the if they sell a yearly Bank of Ghana gives ratings of banks ABC if you're not going to the articles if you know that the bank you've deposited is in be groovy in terms of efficiency and solvency and the following year the bank goes to group C without the bank seen that your issue is going down you can't move your tongue your focus on that can we look at this small issue it may not be small people are in respect of what you are mentioning people are referring to the awards the banking awards that may be what is used to measure who is doing well at who's not doing well but the questions come is it not the same KPMG that you know that's whatever to compile whatever happens so where are they and even alacrán as a questioning you know there are this adi tests of these banks they did not see all of these problems that KPMG now goes in and finds in some place I think that you know if KPMG or an institution that looks into the surface something you say we are going on that I don't get a job I'm looking pretty Nitin but there's the possibility that maybe they may not have the information that the bank gives you a central bank because you required by law but I think that for status is not gonna announce the rule great banks every year that in itself would be a check because if you are struggling we decide to opt out at the multi punitive printing measures to be announced because if you are group B and Group C the you see that they will run on the bank and these are lesser than the minimum I think those things are there the minimum of depositors funds you must have the capital you must have should not be less than ten yes so if you don't have that immediately do come in and start doing what you know ought to put you on notice to do the right things you see I will say that if my mother was alive and I was to the local mother is unconscious we have to amputate the leg for her to be alive I'll say go ahead a probably living mother with one leg the legend I say in that Oh Amanda wakes up and the leg are being cut you commit suicide no well there may be situations where the amputation might lead to further deterioration and quicker death Bobby's out of stripe eyes down your life okay I suspect that's what the back of God it's talking about here now I will read some of your messages that you have been sending in but let's hear from if ya as Elsie was speaking you you were disagreeing and nodding I mean I'm interested in what you were nodding in agreement with reference to section 16 of a 930 instance exchange subsection 7 of the 16 said that despite subsection 3 or 4 the Bangko kind of made in cases of emergency or in the Public Interest revoke the license of the bank or the specialized a deficit taking institution without notice noting that this is where Elsie was coming from the fact that in emergency cases to be fetch away in the bank of Ghana I think that in their press conference they admitted they admitted failure I didn't read it anyway she said we are not read and highlighted their statements I can find that then I think that's what she said I had a very clear this case is that they are mixed that a supervisory division of of the bougie did fail in ensuring that they enforce the rules or supervisor supervision of these bands so I think we need to be fed well but that's why this emergency cases they did not even indicate in their press conference that this was a matter of emergency or requiring imagine and let's go find up for race I think that is also very fair that we don't personalize the issue surrounding this is not a dr. Addison do you see the questions that can be raised if you seem to claim that in all the situations it's that of emergency so you go and I 1 to 23 1 to 3 of the Act but I don't want to thank that that also would be an indictment on the institution it's as well absolutely that's why 1 2 3 7 also says that even in emergency cases as in 16 7 you issue a notice after your emergency vocation has been done so so that was very clear and that's why Bank of Ghana ought to admit like a admit a clear failure in all this this is you pass the admission of the figure and only is not enough they need to come back and say that they are supervisory a division of the bank has filled and that was thoughtfully as to say the fraud by now somebody has to go home even the whole department is sent home it's fun introduction upon investigation for better and further particulars of evidence on what's led to this failure to enforce the law and what to do it to ensure that because you can't just send punish the the individual the 14 months for this somebody ought to have supervised and that's the reason why this amendment of the banking law was implemented you know that we had a law previously and so we elected this new law in 2016 and it was supposed to kill an Evo in the existing law so he's curing that evil is it is not because the law is still not being enforced that's the reason why this bill when it was before Parliament in 2015 went to vigorous debates the gross debates and various mm stages stakeholders were engaged because there was an existing problem starting from the rural banks then we came to this microfinance and say visa laws before then the dkm issue so if you look at this a very detailed law that is curing or even even lifting the veil and the company loan notice why the law is saying that and up in in this act where even the general provision in the criminal law is that you cannot flip the veil but this act you will live the way so personal liability can even be enforced to the directors of a company so we all understand that the law was not to be fair to dig here and we had a precedent squarely admit and put the blame on the super fishing for fishing Department of the Bank of Ghana for the dkm situation and did you hear the Bank of Ghana give a semblance of admission of day not doing a good job with led to the dkm situation but they didn't at that time they did it at that time they didn't but later I think that they appreciated you know that this political diplomatic policy that is going on where people are not bold enough to announce way in other countries somebody would have on their own just walked out resign for failure of people under him or failure to give both leadership in ensuring that those under him or the various departmental name felt bad but they are they and this is politic that we know something that I don't have guys like myself syndrome we don't we know but we should we should and that's why if we don't have the attack myself syndrome and that is why the law makes it makes provisions for they're not it's off to suck you but wait but your point you know about this was some situation of emergency and all of that I suppose that what you had discussed affair you may want to bring it on you see some of these were clearly Ponzi schemes Ponzi schemes the emergency situation them but the public of Ghana itself admits and that's why I think that this conflict I'm just saying that the Lord gives provision for a vocation of licenses come back emergency situations but a co Ghana is some admits LC has told us this morning that some of these witches were notified and and in devising continuously it's not a one-off thing so they're making the application under the law that's what you can come in but she is also saying that this is a new leadership that took over in April which is also a factor we must admit but I'm saying the Bank of Ghana is Bank of Ghana we do not care about what leadership or which leadership but you also have to admit that leadership goes and comes this new leader and that's why I grew up all on their construction manic issue because even if you use this period of he took over in April as an arguments but the construction bank issue he was there when their license was granted so what did you do me what do diligence you bank where and we've seen that risky investment they've done the failure to ensure that risk management is properly done investing in holding companies elsewhere in very risky and unknown churches like in real estate and you have no business going there's money in real estate there's many real estate the process will get their money one day you see there's a problem where directors of the bank sometimes if you look at the formation of the bank the Board of Directors the Peking people do not have the capacity to understand investments and we have to go into this issue about who becomes a board member checking the directors because there's a reason why the company law mix for provisions for directors of a bank or the Board of Directors checking the director of the bank but the bottle director but that the Board of Directors ought to have the skills and expertise to know when the directors are messing up and in the board of directors of beige capital had the expertise I don't think that they would have allowed them to invest in any risky venture or if they allowed them to invest in risky ventures they would do proper due diligence you are sure that that risky investment like realistic it is worth it because we all know what is happening they realized it after sector we are not against we need to but sorry my last point on this be what you write is that we need to amend the law on who becomes the leadership of vog the directors for the who becomes a member of the board of directors of view G because we can't take away the politics of the system so we take away their point when from the president I think we shouldn't give it to him I think we should we should do institution may be vetted by the appointment committee of vitamins we're sure that you are qualified but if you that how I start vetting him actually I'm coming to even that I have my own decision thing well the intention of the people whose money's you seek to protect and movies whose who are the subject of the majority in parliament were with of their way in public the vetting be screen yet my door to have their way but you are they do you what does not divest their pointer or a point do the wandering appointment from picking a party passing who may be qualified and getting the support of the party in parliament to endorsing okay so we will take our next break but I want advance to just finish up and then we end on this discussion [Music]

Channel: JoyNews

Views: 18,373

Rating: 4.030303 out of 5

Keywords: Ghana Political Issues, ghana Politics, Matters Arising in Ghana, NPP, CPP, PPP, National Budget, Chieftancy, Ghanaian lawyers, Economy, Constitution, Election, campaign, youtube, joy news, newsfile

Id: zZmnLwCitV8

Length: 122min 30sec (7350 seconds)

Published: Sat Aug 04 2018