Last Updated- Apr 4, 2009 5:20 - - 0 Comments


Graphic Business: Bank of Ghana must be firm

bank-of-ghanaIt is not a secret that the problems of fake currencies and poor banking practices in the country have been with us for many years. Even though some banks have openly talked about the problems, others have decided to disregard them totally, as if they are covered by banking secrecy laws.

Yet, these are the very problems that could grind a whole country to a halt. Yes, they could! When customers lose faith in an institution such as a bank, how would the government be able to use monetary policy measures to drive home its economic plans? Banks, indeed, have a crucial role to play in an economy.

It, therefore, behoves all those given licences to operate a bank to ensure that the integrity of the banking system is protected at all times. Therefore, the actions taken by the Bank of Ghana (BoG) against Amalgamated Bank (AmalBank) and its Managing Director, Mr Oluwole Ajomale, must be commended.

We are, however, of the view that given the seriousness of the issues raised by the central bank, the fines imposed were not enough.

In fact, the claim that Mr Ajomale “himself engaged in the malpractice of making payments of forex cash into his foreign currency accounts and making trans­fers in disregard of regulations” is very serious. For the leader of an institution to be engaged in such acts, knowing so well that it could lead to problems, was rather unfortunate.

And, sadly, despite repeated assurances for more than two years by the bank that it would ensure that everything was done to rectify all operational defects, nothing was done.

“The repeated violations are unacceptable and cast the bank in a very bad light … This is particularly serious given the assurances management gave to the Central Bank that such practices would not recur, when the first spate of violations were brought to the attention, of management and the Amalbank’s board, ” the BoG worryingly expressed.

We believe that a banking institution must  be faultless, regardless of the situation.

Confidence and trust are the two main ingredients that drive an economy; indi­viduals must, therefore, have faith in key institutions, such as banks.

Therefore, the recommendation to the board to “find an immediate replace­ment for the managing director whose conduct constitutes a serious violation of the banking regulations and the For­eign Exchange Act and undermines the trust and confidence reserved for a per­son in that position” is a step in the right direction.

But the BoG must not only make scape­goat of AmalBank to just let banking institutions and the general public know that it can, indeed, bite when necessary. It must ensure that every known mal­practice, not only by the banks but also the other non-bankingfinancial institu­tions, is firmly dealt with.

In this age of global banking and financial crisis, the last thing that should happen in Ghana is a banking system flawed with malpractice.

Indeed, the BoG must be ruthless to ensure that our banking system is not brought into disrepute.

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