prof. John Gatsi, Head of the Finance Department of the University of Cape Coast, has said that the reforms within the banking sector cannot be said to be complete unless there is enough liquidity in the banks to meet the demands of depositors.
Speaking on 3FM’s evening news today, January 4, 2019, monitored by Awake News, Prof. Gatsi explained that, “the core purpose of the banking sector reform is not about reducing the number of banks from 33 to 23. The main purpose is to ensure a solid, sound and stable banking sector that can deliver sustainable financial services to households, the private sector, and the government whiles ensuring confidence within the framework of good corporate governance”.
According to the renounced economist, “there is massive illiquidity because illiquid bonds were issued to support the process. This has prevented the Consolidated Bank from meeting the demands of depositors”.
He maintained that “meeting the minimum capital is not the same as liquidity of banks. The business is potent when liquidity is solid and the health of an economy is driven largely by the liquid banking sector.”
He added that “Some banks met the requirements through mere booking transactions, the work is about ensuring a kind of corporate governance that does not undermine banking services. The work ahead is about ensuring the liquidity of the banking sector. Without liquidity economic activities are still at risk”.
Since 2017, about seven banks have collapsed. The crisis has to lead to unending panic withdrawals at some local bank with GN Bank being one of the most affected banks.
Today, the central bank has announced that it has downgraded GN Bank to a saving and loan company while revoking the licenses of Heritage and Premium banks.
Source: AwakeNewsOnline.com / Efo Korsi Senyo / senyo@awakeafrica.com