Chartered Economist, Mr Emmanuel Amoah Darkwah, has predicted some level of job losses due to the inability of some banks to meet the recapitalisation.
He is predicting that the decision by the Bank of Ghana (BoG) to downgraded some of the banks to a savings and Loans Company for being unable to meet the minimum paid-up capital as of the December 31, 2018 deadline would affect their customer portfolio.
He said, because Savings and Loans are unable to do some activities, the banks that may be down graded would have some of their customers moving to other banks.
We might lose some jobs, we might close some branches and we may have some board and shareholders taking decisions to have some job cuts and other effects,’’ he added.
The Bank of Ghana is expected to announce the list of banks that have successfully raised their minimum capitals to GHC400 million in compliance with its earlier directive, which elapsed on December 31, 2018.
Information available indicates that the BoG will take key decisions on two of the banks, using provisions set out in Sections 103 to 137 of the Banks and Specialised Deposits Taking Institutions Act 2016 (Act 930).
According to a publication by GraphicOnline, two banks are unable to recapitalise, with one having a capital deficit in excess of GHC800 million.
One bank per the details is being downgraded to a savings and loans company for being unable to meet the minimum paid-up capital as of the December 31, 2018 deadline
The publication also indicates that the BoG maybe announcing that it has accepted a government-backed arrangement by private investors to raise up to GHC2 billion through bonds to invest in six indigenous banks to enable them to meet the minimum capital.
The first tranche of the bond could be around GHC800 million and will be used to recapitalise well-governed, solvent but undercapitalised banks.
Commenting on the directive, the economist told Nyankonton Mu Nsem on Rainbow Radio 87.5Fm that, we would have a very buoyant and robust banking industry in 2019.
The buoyancy he noted will help improve the various sectors of the economy including agriculture, service sector among others.
He admonished the regulator to enforce the banking laws on corporate governance in order to prevent collapse of banks like we witnessed in year 2018.
Non-performing loans he indicated is also a major challenge and so stakeholders must work hard to manage the situation, he suggested.
Mr Amoah-Darkwah was worried of business conglomerate that runs banking operations.
This practice he stated should be reviewed because some of the revelations that led to the collapse of banks was due to failure to allow businesses associated with some of these banks, to go through strict procedures before accessing loans.
He said ‘’for us to do good business in Ghana, business conglomerate should look at how to distinguish between corporate governance and how they manage their other businesses. This what I believe the Central Bank and government should focus on,’’ he added.