Banking Sector - UPfront on JoyNews (1-8-18)

hello good evening welcome to upfront so it's still our coverage of that big big breaking news story the bank of Ghana of the Republic of Ghana has actually collapsed five different banks and also appointed a new bank established not long ago to take over the assets and liabilities of these bands I'm sure by now you might have heard that junuh Bank on a limited the Royal Bank on a limited based on Ghana limited Sovereign Bank on a limited and construction Bank a limited has been their licenses are be revoked and that means that they've been put together and all of these banks are going to be under a new bank established by the government of the Republic of Ghana all of the fallouts what this means for the banking sector what this means for a deposits with the various banks is what we'll be discussing already a press release from the Bank of Ghana is indicating that all deposits of the five banks are safe and I've been transferred to the new bank called a consolidated bank customers can carry out their business as usual as their respective Bank which will now become branches of the consolidated bank very safe the back of Ghana statements also saying that all staff of these banks who become stuff of the consolidated bank boards of directors and shareholders of these banks however no longer have any rules so that is the late introduced coming from the back of Ghana in the last two hours we've been told that five banks we knew they were in distress we knew there was some difficulty along the line you do remember that not long ago KPMG was appointed to do it and help the Uni bank get back on his feet apparently that process did not go as was supposed to be and the reality on the ground today is that the Bank of Ghana has collapsed all of these five banks revoked their licenses and there's a new banker they often to take care of the assets and liabilities of this Bank this brings to mind what happened in 2017 where the bank beauty and capital bank went through a similar process will be dialoguing on this and many more already in the studio with me is a minority spokesperson on Finance but first we take a short break and be back with more on this [Music] you were combate my name is Raymond aqua this is upfront and the big breaking news stories in the last two hours is that the Bank of Ghana has actually announced taken over the management of some banks in the country there are five of them the affected banks are Royal Bank Bates Bank Sovereign Bank the construction bank and Zuni banks these banks that we put the assets and liabilities put in a new name called the consolidated Bank the Bank of Ghana's reassuring everybody that your money with these banks are safe as the banks directors and shareholders do not have any rules in the new structure that's been put together indeed the bank of Ghana's move comes just a day just yesterday the construction bank voluntarily folded up it's a precious here in Ghana and this comes on the heels of Banco Ghana also pumping some 5.6 billion city's bond to protect you the depositors were of your bank's the money's in these banks we also understand from the statement the Bank of Canada's issued that workers of the five banks they are guaranteed that there shall be no job losses but this is with the caveat which says in the interim it's unclear what's gonna happen to these people in the longer term and the nearest future and the back of Ghana actually increased the minimum capital comment for these banks for one day and 20 million to 400 million to improve the stability in the banking industry while growing in this sector you do recall that some of these banks have been pleading with virtually everybody from the President to the vice-president through the National House of Chiefs demanding that they be given a longer period or there were the 400 million expected of them as capital requirement be waved one way or the other but that has not happened yet and the decision has already been taken by the Bank of Ghana Ruby dialogue in on this practical decision we'll be talking to the people who run these banks in the course of our conversation by hearing the studio's with me is the former deputy finance minister he's also the spokesperson of the minority when it comes to financial matters in the Parliament of the Republic of Ghana learn about Kissel are to forcing honorably welcome to our front thank you very much big news but were you surprised I think to a large extent yes I'm surprised because in the case of Yoona Bank in particular we heard from the grapevine that some understanding is being rich to the attenti other shareholders has promised to capitalize the bank in the coming days I had a deadline was given and I don't know what actually happened for us to hear this news today and then the likes of beige Bank is quite a new Bank so I'm surprised what I'm hearing a very surprised about Sovereign Bank and that of the other one the Royal Bank as well so there's a construction back yeah who previously was with ADB is the one who set up this particular Bank not long ago it was launched fanfare and all of the today he's not the owner exactly running it's okay but I had information that has that yesterday the forehead of themselves yes so it looks as if they had prior information to this from from what we are hearing because you cannot for a bank only for us to hear the next day that the central bank has signed approved pitches an assumption transaction with a new crated vehicle quarterback consolidated bank so clearly it looks as if the management of that Bank in particular hard from background information as to what is going to happen today in itself is something that we are interested would like to investigate that going forward well there's a background to all of this this is because the Bank of Ghana is saying that the measures is taking about is a part of efforts to address legacy problems in the banking sector and to restore the stability and resilience of the financial system in fact they believed there were some weaknesses in the sector were actually beatable to macroeconomic factors which probably is not the doing of these bags anyway a trend of poor corporate governance poor risk management practices related party transactions that were not a bad board and regulatory non-compliance and ports provision had image over the years leading to a significant buildup of vulnerabilities in this sector I think the central bank has come out with a statement I'm here to look at it statement in detail I've read million pieces of that but overall I'm looking at the impact on the general economy as a whole and and to assess it what does that mean for the ordinary Ghanaian and what does that mean for for for for debts and for the economy the macro in particular let me say that the central bank has just announced that the taxpayers cost as a result of the collapse of these two banks is five point seven six billion gonna series approximately 1.2 billion dollars it may not add to the fiscal deficit but that doesn't make any difference the difference is that this is going to add to public debt for what it means is that going forward in future you and I will have to pay this to taxation I've got the whole night producing something that is be germane to all of this the first is this the step in the right direction you can't conclude that is a step in the right direction i can't conclude at this stage otherwise i can i can say that at this stage we'll have to get more information we'll have to assess the situation and come out without our definite position but III will not conclude that as a step in the right direction because considering the economic impact on that point if for instance if you said over the years and of course yes but over the years include the time is he it's that is what i find it very difficult to a sub suam distance when they say over the years and just conclude and say that the previous administration tried to say legacy issues and all or not let me tell you they've been in government for about 20 months this month the 28 month yeah we were told when you new bank initially when they announced the administration of you new bank yeah would is 6 monday we're going to turn over the bank what did I say turn around the bank you say what's impossible I told you we had similar conversation I said six months you think you're magicians and you can turn over to turn around the bank within six months and said I bet with you that let's wait and see after six month we hear what they will say here are we today what are we hearing a when pitches an assumption agreement yeah to the standard state is going to pay five point seven six billion Ghana cities approximately 1.2 billion US dollars as public debt that is not acceptable but you should be particularly wild by some of the things that KPMG found after his review of Union Bank which is in the back of Ghana ten page report he said June bug had given out amounts totally 1.6 billion to shareholders and related parties in the form of loans and advances without due process and the breach of the relevant provisions of at night Twitter and this is actually act this was an 2016 I put together I I push this true true true very good banking and the special deposit-taking institutions month in addition these decoders and related parties has also been given amounts total and 3.7 billion which were neither granted to the normal credit delivery process nor reported as part of the bank's loan portfolio they are also not secured with collateral and I trotted no interest income for gene back altogether shareholders and relator parties of unity but had taken out an amount of 5.3 billion Darcy prostituting seventy five percent of total assets of the bank the think is a very serious situation of course it is and I agree with you it is if proving that that is the truth then this is really serious situation ever have had contrary statement coming from the shareholders of your book valid now were the KPMG put together that initially when when the issue came up initially early days when they raised the issues of corporate governance in a bank the management and the the owners of unit Bank put out a statement to dispute some of this claim but to be honest from what I'm hearing and what you just read to me that about 5.3 billion were taken from the bank represent about 75 percent of total asset I think is something that we'll have to we are interested in a matter in the coming days we are going to look at it carefully and come out where they should without statement because that's even more than it was it is really serious that's even more dire be world with but let me go to the phone lines give us more dealers who agree okay after your phone line yes over eighty nine percent of any banks loans and advances book of three point seven four billion assorted first made 2018 where classified as non performing eighteen nine percent of the bank's known what let go to the phone lines and speak to lecturer of economics at the investor of Cape Coast dr. John Gotti thank you for joining us on the full line now doc was this surprising to you was in love incoming and is it a step in the right direction the question I'm action is whether this is a step in the right direction the decision by the Bank of Ghana to revoke Lices consolidate these banks and establish a new one that's going to take away the assets and liabilities in this case indeed government are social in terms of bonds [Music] away with us the people of Ghana who be paying for this - this medium bonded to be a happy income through Parliament that the button government of Ghana has very successful initiative ability companies involved in the activities of banking so all these issues need to be addressed before we come to that firm completion horizon of course is the duty advanced of data to ensure soundness stability and very strong a robot banking sector to drive economic activities in the market ok so the manner in which this decision and action has been taken will remain questionable that's your immediate impression but mindful of the fact that you've served on the ADB banks board in times past would you in your own capacity admit that if you demands are given out amongst totally 1.6 billion to shareholders and will later parties in the form of loans and advances without due process and in this establishment of domestic arsenide induced you're dead no problem about that if they are not following the credit procedure in violation of the Act not only the new art by the domestic action against individuals there's nothing wrong about that but I've made a specific problem relating the universe are relating to the KPMG report that is the point I am making and I need to also put the record not be involved abd boat so clear okay okay well very much so thanks for that clarification they understand we have is that shareholders I related parties of either Bank had taken out 5.3 billion constituted seventy five percent of the total assets of the bank how was it possible that a bank and willing to engage is interesting but we are told by the same governor earlier the press conference that the indebtedness of governments and other related agencies in the States do not in any way have a massive tool on what could be the financial fortunes of this particular buck do you have control information what you are going to rely the will is because that is the way that I do nothing that tons of then I can come forward and say that the treatment of the meat by it wrong and that is not going to be for the better and now let me find out from you it's not only Julie bank does gone under we're talking about a bunch like the Royal Bank we're also talking about which are recently put together like a Construction Bank Limited we are also looking at Sovereign Bank is this an indication that the financial sector specifically the banking system had been a long time I for example was given a prominent rule in specificities and liquid issues were also given prominent risk management were also given prominence room and you also read that internal control was given from this room including appointment of directors so the bank of Aluva authority for those who would be appointed to the band to manage from each other or in attempt to ensure a sound system for band to operate in to ensure the stability a reporter that is blessed by economic activity because both these are known and I envision that those band directors individual who normally Donna who are very clear what we done to those people okay okay but some are saying that it was possible for you to actually remove directors also dealt with stakeholders which you felt had actually breached the rules where they're taking the bank through the Carnot process and is going through now there's something that you think it was worth considering I'm saying some have suggested that was possible to deal with directors of banks and also other actors in this particular case who acted wrongly without having to in this case amaura not people the fans of the of the of the band in the manager I'm talking about now let me come to this point what I hear you saying is that gamma cannot absolutely observe itself of complicity in this matter Luther cuckoo board agency [Music] who's the regulator Bangkok Donna is the quasi regulation on fighting Union Bank in relation to ABB the Minister of Finance of the human body relative bbbb-but Universal to me this is a different matter okay separately on this particular point now my final question to you is that much has been said about how we want to reform the banking sector and improve it and also make it as solid as we ought to put it but there are those who are saying that you cannot do this by holding errand directors and shareholders responsible as in the directors who partly contributed to this problem ought to be directly held responsible for this kanker and the state should not the money into it said that the government has established the bank that is what the statement from the bank of gonna say and certainly those are questions are put to my guests here and the studios but for now I appreciate your time on the show many thanks to you dr. John Gotti he's a senior lecturer of economics at the investor of Cape Cod and back edge studio my guest is a former deputy finance minister in Ghana and also a member of parliament who speaks for the minority on the finance issues in this country now the question before we go back to what we were discussing it's pretty simple was the government of Ghana minded by the father had to bring the decision to set up a bank a barber be doing some huge boring for and on behalf of the people of this country that decision was in on Parliament no not not at all in fact you are the Finance Committee fat the Finance Minister yeah has made a big disservice to Ghana obviously the media review was read not long ago less than two weeks ago hours of the view that he could have hinted the establishment of a new bank through a major government policy statement to the people of this Republic actually he decided to keep quiet about it in fact I've raised the issues relating to the collapse of UT banker Capital Bank over a number of times so many almost six months it took the Minister of Finance to do only to present only one paragraph saying that the bank the collapse of the two banks is going called the taxpayer 2.3 billion after a med job by the statement was read in November he failed to make any major announcement on that so I was of the view of the opinion that a Minister of Finance through the medial review could have come properly and let the people of this country be aware what is actually going on unfortunately they decided to keep quiet and to keep the people of this country in the back but let me also say that at the end of the day an amount of 5.7 billion ganas Cities is going to be paid by the taxpayer not the finance minister not only the people of people in government so it is only fair and prudent for the minister responsible of finance to let the public be aware how much we are going to pay yes he has just announced the 2.3 billion so the one of financial sector cost 2.3 billion today another 5.7 billion is going in the region of approximately let me put it eight billion gonna cities you know what eight billion got a cities could have done eight billion gonna cities could have done a trade carriageway highway 3 here trader a Krakow mercy and a crack right to talk riding but but it's not a magician I think no you see the deck depression here what I want to find out is it is the only option available to government was there alternative the alternative was in the case what sort of alternative which say it was I told you from the beginning that the approach is going to fill in the first place announcing a ban going into a demonstration the bank would never come out in fact I've never read anywhere someone telling me that a bank has been announced that is going to go to and to a demonstration about how survive it will never happen it will happen because you have signal that the bank is on it news who is going to do serious business with that bank that is an administration in the first place for six month people are going to move there even in the dear capital from the bank so clearly that was going to fail I knew that was going to fail unfortunately the government decided to go that way the question simple question I ask myself is that these were the first time banks have gone I've gone into insolvency issues and capital adequacy issues but let's learn from best practices even in America even the UK rare Bank of Scotland was saved in the in in in in Holland in Germany Daichi Bank received the government looked at the general economic impact asked visibly comparing it to the costs to the taxpayer in terms of resolving the bank so at any point in time you have to ask yourself a simple question how much is it going to cost the state in resolving the bank visa vie how much is going to cost you by giving the shareholders patent at the central bank in addressing in addressing the press they should have let us be aware of some of the options I want to believe that they might have probably going through all of this no III well that is your opinion but as long as the central bank failed to inform the people of Ghana that they did this evaluation then I ask myself was this really done was this considered in the first place so far I don't think it was considered 5.7 billion fiscal cost is not cheap money but very importantly let me raise one one important point here in one of the statement they are saying page six they are saying that over 89% of uni bank loans and advances book of three point seven four billion asset at the first mate 2018 was classified as non performing yeah is this I want to ask myself why not perform it who are the debtors I don't know government of Ghana related agencies and what is the component of that it's done on the fundamental problem is none of what has sent unit bank to where they are today 3.7 billion 3.7 billion is not as more money yeah because look KOCO Bob owns them in fact Bank of Ghana couldn't the KPM this report Bank of Ghana themselves their debt has to univac in fact the University so so you know bank in the in the debtors book of uni Bank Bank of Ghana is one of them cocoa board is one of them mmm cocoa pod is one of them Ministry of Finance Road Fund and other government agencies so you saw what is happening to select and identify in the balance as one oh no no I'm going to go that because you asked me so I'm going to go to the rest because he see this busy yeah I think the reason why we are dwelling on Yuna Bank is that the chunk of the fiscal cost is coming from the UNIVAC yeah is he out of the 5.7 billion fiscal cost you can easily see it about 4.3 scumming from UNIVAC from from what I'm reading here you see almost so so that is where the chunk of the fiscal cost is coming from little to the likes of what you know the other bank and Construction Bank virtually they are very little asset a very little liabilities so the fiscal cost will not be that huge the one related to Sovereign Bank it will not be that huge probably beige is another one that we should be worried about because of fiscal cost to the state may also be because yeah betas been around and considering what they do they may be huge fiscal cost as well and then Royal Bank but the two banks I don't think the asset liability books are dying show me that this decision by the Bank of Ghana was not the best one um I I think you've asked me that point and time and time and again I want to say that it is too early for me to conclude what is best or not not best in the interest of this country because I'm looking at the general economic impact okay okay um issues relate into jobs you've looked at economics okay but he comes with jobs this is their jobs are secured in the interview say in the in the meantime so please I don't know but let let let me blunt here if you consolidate jobs yeah and his head off his jobs because auditor you won't have to manage in there it is mmm-hmm you have one managing director yeah okay you won't have to head of operations you have one so certainly nobody can convince me that jobs will not be lost it would to a certain happy there are branches that maybe match in the first place which is prudent so this act is that is going to happen anyway job security is an issue job creation is an issue in this country and we've been talking about it so let us not ignore the fact that jobs would certainly be lost it was certainly happen its something that is inevitable because consolidating five banks the outcome will mean that certain jobs will certainly be lost so I'm not concentrating on unit bank but I'm I'm trying to let you be aware of the general picture there Kannamma impact yes the central bank has come out to announce something this is our job to evaluate the impact on the general economy so first you start with the economy how about the banking sector yes the banking sector is fragile as we are aware I'm surprised that one of the banks was from what I had proud to the announcement I thought there's going to be a setback I don't have to mention the name of the bank is not necessary the interest of the bank is not necessary because I'm saying that from what I had possibly put yes your bank is something that is for the people central bank to to to say but I'm getting worried about it I'd have been picky because yes the banking question there situation is even better than some of their Banford are collapsing today they were had more or less at par you saw where there was a liquid with rare rare but and that's the general question I want to ask why did they decide to remove one of the banks at the last minute why is that a question I think there's some very serious questions that we the people of this country we have to be interested in and ask the right questions in the meantime is fine I thought is he yes the governor had him assuring us that a government of Ghana is going to intervene in the banks that are owned by the state yeah like ADB a lien for an idea or happens to the rest so so so um I also had in the grapevine that GenBank is going to match what another bank yeah I think GN premium and another one they imagine so far not had any news on prudential bank for instance and and the others so I'm curious I want to know what is happening to those banks as well business people take loans from these bars what happens to these people yes what hap is after the pages and assumptions transaction for instance they are going to evaluate does that some of them are performing and others are not performing in fact in the books of the bank their assets know the bank so and you noticed that the governor said that some of the asset will be evaluated some of them will go into the new bank the consolidated bank and then others will go to the receivers yeah they are going to receive they can get the money and if they'll get their money that they would so if I had a loan from any of these banks and we have to fix stems and fix rates involved would that have to be reviewed - nah I don't think so I don't think so because the paddy pitches an assumption transaction they are taking over the assets that are performing as agreed okay yeah so I think eventually they will have to sit with them and then even if they are going to review it they can do it unilaterally they will have to work together with a customer's consent for a bank that has its 9% of its loans and advances which is some indefinite round underperformer what happens in that case it is really serious 89% hmm I mean it means that if you have a hundred million only only 11 million is what they are servicing yes I mean unbelievable it sounds terrible unbelievable and then it's something that I'm curious I want to know the breakdown of those underperforming those who are yes yes they have some level protection yes look it's it was important for us to know the breakdown who are a cop it is government also involved and why is government or sanitary met who had a chunk I mean the main customers the big-ticket we had coke about two hundred twenty two million we had them would fund another 317 million we had Minister of Finance themselves so from what I read government of Ghana and it alliances put together you are talking about a billion is that or or they are more you see issues that we have to be more their money which is current deemed non-performance and this allows to be affect people paying the laws are servicing the laws in this case what happens to the laws is the new team taking over or they are going to pursue it that was pretty are going to you lose the receivers and and the current bank see we're going to pursue it was it likelihood or don't use ones would collateral then they would come after your collateral I see yes in fact I'm going to as a member of parliament 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 fed up about you class about this 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 Ghana Cedis isn't too small money okay big money okay that's interested I hope see how that query goes in the Parliament of the Republic of Ghana is interesting how even beige bank limited also had a form when it comes to the loan portfolio yeah 72% non-performing loan ratio equally huge thanks possibly said I have this huge non-performing loan ratio see again and and I strongly think that government is copied who are those mostly a government contractors really mostly paying contractors I don't think my review of unfortunately of this success Elaine that during the debate and said that look the evidence available to us to their own data the summary of economic performance for 17 and 18 for about half year know from the Minister of Finance the okay doesn't suggest to us that government is paying contractors in fact government is cutting down on expenditure let me give you some typical example what fun what fun is supposed to have a huge budget through the carpal and realignment Act would fund money approximately four hundred million has been taken away from them how did they pay contractors out of that they can't be I see if our water contract with the hope that that is going to come call their multi your contract the diamond is going to come for them to pay get furnace on its news why because of carbon get funny supposed to get about 1.4 billion unfortunately I get in four billion four hundred million it's a billion of get fun monies is no good of education should reduce the hot up into twenty five percent well well onto the onto the happiness is something in in the first place in the first place you don't have to copy education hurt my opinion okay in the first place they don't have to cut educational out why do you cut health insurance why do you cut education education budget going into the infrastructure part of education delivery it's been cut so that is where the difficulty is so they add in the first place by cutting education budget two years in a row get fun has been denying resources are possible one point five billion galaxies so what is happening that is going to impact on banks and contract us if the impact on contractors automatically is going to impact on banks this is what is happening because they take the money from banks that is what we are seeing let me take you that the disassembly common fund same thing is being cut and aligned so what happens that contractors working in assemblies are not getting the money they needed money to be able to pay their banks they are dead so what happens banks are going in down this is what is happening when you take the road budget in the in in the actual budget statement you notice that in the past we used to have what we call road RS every year we were allocating 300 to 500 million gonna city's yearly for road RS is being cleared off so no road RS paid in the last two years what is happening capita budget going down and that is why you notice in the budget statement that the capital budget as a percentage to GDP is dropping from for princes Billy a percent of GDP in 2016 to approximately two percent in 2018 this is what has happening so we have seen the impact here the system and I want you to explain I mean they in the case of a construction bank they claim by the Bank of Ghana is that the bank is not able to assess investment purportedly made in its name with other financial institutions the Bank of Ghana is therefore concluded at a total of eighteen million Ghana Cedis of the bounce Rada and 20 million initial paid up capital is unavailable to the bank for its operations leaving an amount of 14 million for it to approach with in fact they have requested for that we're talking about the construction by the bank shareholders to recapitalize it to the minimum capital required at the time of its licensing while the Sherwood has submitted plans to the Bank of Ghana this plant know that in this success so the claim was that they are made investments without financial institutions but the bank organic says these amounts the claim was paid up was not available so in effect they really had only 40 million in the first place yeah I think the 400 million capitalization in itself it's too large for some of these banks to be able to survive it's not what's supposed to sustain and improve the financial section 400 million is too large I think we've made this point time and tammany yeah for those small banks they could not hack 400 million about a hundred million u.s. dollars they couldn't they can't so my opinion I said that earlier that yes I was of the view that we don't surrounded a banking sector also - for foreigners and to the large multinationals we should be able to t8 into tier 1 2 & 3 well you can have those small banks also in the system because clearly those small banks also has a major role to play in economic development some of them SMEs small medium enterprises banks with the small box Gen Bank for instance is playing a major role in this country a road that ordinary banks were not like to play but a big multinationals like the thumbs stand charts some big Barclays eco but they won't like to play that go to the villages rural Ghana G and the bank is almost everywhere almost every district capital they are de mobilizing resources and given advances in the form of loan to this SM is in village and POW enterprises they are giving them those kind of facilities so you cannot also say that you want banking to be a privileged sector business for those who are privileged no you don't do that you have to allow the small banks or suit resist in a way of ensuring that those most small businesses are also Bank and they have opportunity to get advances so I think the 400-million itself was very problematic so a new Bank coming in let's say in 2016 with a hope to survive you slap 400 million how do you expect them to get 400 million if for instance they are going to start with they can't get that that capital no wonder koakuma away was the name is a construction mark yes construction but no no no no wonder that construction bug decided to fold up because they can't get it in the first place but the claim was that the reported investments was where they told by the money would you see they were they were coming in we're at a time when when the static capital was how much was that I think is yes 120 million years 120 million they had started with let's say 80 million okay and all of a sudden it has moved from 120 million to 400 million how do you expect them all of a sudden would a new bank to be able to mobilize another 400 million they couldn't have got that in the first place so I'm not surprised in the case of construction bank I'm not surprised the idea out of the system there's a peculiar situation with the Sovereign Bank in fact the banker says the promoters of the band have actually been asked to submit their search to the bank and the directors represented the original show others have seen resigned the problem there was that was licensed as an investable in 2016 and began operations in 2016 as part of the back of ganas investigations into the failure of the capital bank currently receivership it imagine a sovereign bucks or original and initial capital contributed by its shareholders was funded from transfers from capital back which had been presented about Organa as investments on behalf of the bank subscribe to this licensing a substantial amount of the bass capital was placed with other financial institutions as an investment for the back the mangas I would have been able to retrieve this amount from the investment firm which it was placed and it's been witches and is melted the investment so we can liquidated by the shareholders and parties related to them flowing and Christ by the Bank of Ghana the promoters of the bank admitted that they did not pay for the shares they are quiet in the bank oh my god is it this is criminal yes please it's criminal I mean if he's proven that is the truth it's criminal I've had that the owners of Sovereign Bank has something to do with the universe and you're a banker the capital capital that's what about say so the the two banks are related okay so they were taking money from one bank to another Bank yeah I think this has serious issues and I think beyond the talk I think the central bank must act when it specifically what and they have to act and find out if the element of criminality in all of the box and then do it that one Supporter we support them remember our the first person but I'm really shy when it came to talk to about raise the issues on capital Bangkok raise the issues on YouTube and I wouldn't change my position issues about some 2 billion which were supposed yes which we are now funding as a state in some form of bonds and that were supposed to change the owners and directors of this book that is not happy really I had the way invited to be locally by Yuko and I don't know what happened afterwards more funds don't pay for it yes government of Ghana we are we are servicing the debt as we speak unfortunately informations are not forthcoming the government is not giving us information the Minister of Finance is not giving us information the governor is not giving us information I taught in a non sense something like this they had a wonderful opportunity to give us background what has happened with the ones the first to darken ours give us details and the actions they are taking and then announce this one I see I think that is what they should have because they owe the people of Ghana that responsibility unfortunately they have decided to register that the Capitol Bank is receivership watch what you mean what you mean by the what has happened is attempts to achieve the money item to receive the money to retrieve the money that's what I don't do so become really see see in the case of capita bank yeah we had some assets that the management and then the owners were using shareholders capital yeah or shareholders forever they are using depositors money to acquire what has been what is the outcome as we speak have they been able to identify any this way news that way being circulated in social media where they really do treat have they verify them have they been able to acquire some of them to defer some of the debt by this night behind the Parliament of the Republic of Ghana has it occurred to you that you need to summon the finance minister or most importantly the bank of Ghana governor to explain some of these issues and give direct answers through this matter if I'm proud to the media review yeah we engage the governor and let me say that it was a very interesting conversation I had a very frank discussion with with the governor on some of this issue did he give specific information he gave us some basic information relating to the collapse of the two banks and then that proved out they gave for this which is an assumption transaction for GCB so we asked some questions they failed to give us from detail as to uni Bank and the four banks that has just been collapsed differently give us that information we probe further because obviously we've had others grapevine yeah for today I'm even hearing that if gas not taking them in the coming days or coming months they will have to no choice now to announce some some some few banks also go into the same line what I'll you have to create another special a qualifier and give it to them or they would join this call so databank of Ghana bank Ghana Limited is another matter I see it's Anna D'Amato so we engage them for we've engaged the finance minister or nobec an operator or some of these issues the only difficulty is when you meet them and you ask for questions the answers doesn't come as you would like it to come because I believe that in discussions like this we all have a responsibility to engage in a very frank discussion frank conversations but you know what exactly is wrong with the furnace might as well waters just how would you be willing to invite them and call them back in it's it's inevitable I'm going to make the request to let the chairman of the Finance Committee right from here and then I know he he will is someone who has what that central bank before and he will be also interested in the matter so I strongly believed and the coming days did the Finance Committee of Parliament will be engaging the governor of the Bank of Ghana and the Finance Minister for us to deliberate on issues that we are here today do you think this is the last you'll hear of these takeovers disappointment for administrators and the because we're told that when you GE Capital Bank happened it was going to be the last war when all was on the financial front I don't think so I don't think so I said it's because the situation in itself is very fragile in the sense that 400 million gonna city's capitalization is quite a chunk of money I still think that some of the banks may not be able to raise the needed capitalization to be to meet a deadline and if they fail to do that then then of it will happen go through the same route I had that rare Bank was in discussion with potential Bank to match so now that the Royal Bank is gone who is going to merge with Prudential Bank I think is a bigger question we have to ask ourselves and and what happens to the fate of Prudential bank they will not have to get some money to be able to capitalize or they will have to find a new partner to management I think it's a bigger question and whether they will be able to do that is another question there are other new banks in the system we know heritage and the others are also very young and new in the system I've had announcement of Jian and the premium bank and Sahil is also very important one as to whether if you add all of the assets put together what I do we made a four hundred million it's another matter I think have no hard opportunity to compute you using their posture from a report to be able to cause there's a question that you need to answer it is the NDC government you a deputy finance minister in leave a huge debt in this area for these banks is the genesis of this problem traced back to the John Dramani Mahama administration and its dealings with banks boring from the local magazine in the way that he make the bust virtually it is led by the time he left office it's a government did not leave a debt no drugs you see if a new government comes in yeah and we've had in the last video when someone said and this o contractors will not be paid we suppose that everyone who would under press the Mohammed regime is an NDC contractor so we won't pay you this is what we see I see because they have worked legitimately people have worked at the cocoa sector they needed to be paid they've done the job they going to the banks for knows because of politics no one want to pace them this is what we will see if you've worked at this assembly work that get fun work that good fun and nobody wants to pay you as a result of capping or in quote attacking what happens this is what we'll see so I will not say is because of legacy problems it's because of policies that this government is implementing if you decide to cut all started refunds if you decide to say that you are not paying contractors this is what we see my final question to you in this case will be of course still on whether or not the NDC in any way contributed to the current position that we are in is this at the instance of the IMF is the decision to take these banks through all of this process are the stars of the IMF you see I know the IMF never said in her that the capitalisation should be four hundred million okay in fact when we engage I am ever they said four hundred million they think is even far fetched really yes that is the conversation they informed us at the Finance Committee when we met them now they think the four hundred million is a bit too much but that is the decision of government I know the IMF requested for the asset quality review tests and for us to be able to evaluate the that I in distress position and I'm in distress position and for us to find a way to resolve the issue same as the other one am the SOS the state-owned enterprises we had to do a major review of the SOS as a result particularly those who let into the energy sector we decided to issue the energy secondly this fact no ok get Parliament to approve it get the revenue flow to liquidate the debt going forward so we took action on that one we left office before this one was implemented but I strongly believe that would have handled it differently would have wouldn't have gone through this journey because this is really painful the impact on the economy is very severe oh no but I'm told my time is up and forgive me but we hit you sure we have more on this particular issue because it's just developing and morale the angles are becoming up in the coming days well folks that's where we tied the night service on today's edition of upfront my name is Raymond alcaman guest is a deputy former do finance minister and a minority spokesperson on finance he also had economists John Gotti earlier on in our conversation stay good [Music]

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Keywords: Ghana Political Issues, ghana Politics, Matters Arising in Ghana, NPP, CPP, PPP, NDC, National Budget, Chieftancy, Ghanaian lawyers, Economy, Constitution, Election, campaign, youtube, joy news, latest news, headlines, news in ghana, UPfront, Banking Sector

Id: zoLKmjhZmmc

Length: 56min 45sec (3405 seconds)

Published: Wed Aug 01 2018