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Joe Jackson urges BoG to ‘rate’ banks to restore confidence

According to him, such a move would ensure that customers are abreast with which financial institutions are good or bad and can therefore make informed decision over where best to invest their monies.

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Speaking at the fourth edition of the annual Dalex games and awards ceremony held at the Legon Ajax Park on Saturday, Mr. Jackson said it’s high time the Bank of Ghana stamped its feet on the ground to boot out all unstable financial institutions.

“The Bank of Ghana should declare which financial institutions are good and which ones are bad. In other countries, the institutions get rated; so you publish your ratings. Let the Central Bank rate us. So that when a customer is coming to deposit money, he can look at the institution’s rating and say 'no, no, no, your rating is not good'. By this, those institutions doing well will stand out. But until now, what has been happening is too much rumour, conjecture, and it’s not good,” Mr. Jackson stressed.

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His comments come on the back of the collapse of several indigenous banks over issues ranging from mismanagement and instability.

Last year, the Central Bank had to collapse the UT and Capital Banks, but the financial sector has since been plunged into further uncertainty after five other local banks were merged to form the Consolidated Bank.

The merged banks are Sovereign, UniBank, BEIGE, Construction and Royal Banks.

Mr. Jackson believes collapsing the said banks is not enough, and has advocated for the persons responsible to be duly punished.

READ ALSO: Incompetence:

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In his view, the Central Bank has so far delayed in meting out punishments to the persons whose misdealings led to this banking fiasco.

“The processes must happen quickly so that whoever is responsible will be held accountable. If people are innocent, fair and square. But if they are guilty, then of course let them be punished,” he said.

He further urged the Bank of Ghana to “shine the light” on financial institutions that are doing well so that the public will know.

According to him, it’s unfair that the public is losing trust in almost all banks because of a few “bad nuts” in the industry.

“Let the light shine on everybody clearly, so that those who are doing well standout. The more we decide to manage it or keep it quiet, then all of us (financial institutions) are painted with the same brush. Whether you are doing good or you are doing bad; everybody is afraid [to invest with you].

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“I know I’m doing the right thing, so I say shine the light on my business. And let people know that some financial institutions are okay. It is not fair that some few bad nuts in the business cause such fear and panic amongst everybody.

“There are institutions in Ghana that are doing well, that are growing. Not everyone is collapsing, but because of the earlier uncertainty about who’s good and who’s bad, customers are afraid,” he stated.

READ ALSO: Banking Crises:

Mr. Jackson added that to restore confidence in the banking sector, the Central Bank must make sure that “only fit and proper people" are licensed start a financial institution.

“The laws of Ghana about financial institutions is good, but the laws are not the problem, compliance is the problem. That is why some of us also fault the Bank of Ghana because it is complicit in allowing some of these institutions to run for so long without complying with their own laws. So the Central Bank should just make sure it approves only fit and proper persons. The rest will happen and things will improve,” he opined.

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