- In December 2018, the Bank of Ghana completed a cleanup exercise of the sector.
- By the end of the exercise the licences of 9 local banks had been revoked.
- However, the CEO of CAL Bank says it is prudent to follow the rules in the sector in order to grow.
The outgoing Chief Executive Officer of CAL Bank, Frank Adu Jnr has encouraged Managing Directors of Ghanaian-owned banks to go through the legal processes to grow their banks.
He argued that it is very risky for local bank owners to use depositors’ funds to finance their businesses.
Citing an example, Mr Adu said Barclays Bank, for instance, is a global giant because it abided by procedures and rules in the financial sector for over 200 years.
He was speaking after CAL Bank took its turn to present the ‘Facts Behind the Figures’ organized by the Ghana Stock Exchange.
The MD who retires in December 2019 after 30 years said it takes many years to grow a strong bank.
“The process of growing or developing a bank is not a sprint, it is more than a marathon. So you do not get up in 10 years or 20 years and say that you will grow from zero to hero. You will crash because you will do foolish things,” he said.
He further called on the government to develop policies that will encourage local banks to grow.
“Every country needs its own banks. Nigeria is very proud and unapologetic about that. So you don’t really find many foreign banks in Nigeria. As a country we must also develop our local banks,” he stressed.
The Bank of Ghana (BoG) undertook a cleanup exercise which ended in December 2018. By the end of the cleanup, 9 local banks had lost their licenses.
The BoG said some of the banks were moving depositors’ funds and unlawfully transferring funds into allied companies.