NDC knew about banking crisis but ignored it-Bawumia

The Vice President of Ghana, Dr. Mahamudu Bawumia has alleged that the previous Mahama government was aware of the crisis in the banking sector but they turned a blind eye to it.

According to him, in 2015, the IMF pointed it out to then NDC-government about the lapses in the banking sector but they ignored it.

He also stated that Bank of Ghana as well as himself (Bawumia) also warned the NDC-government about the crisis in the sector but they did not pay attention to it.

Speaking on the matter on Peace FM, Dr. Bawumia said,” The previous government was fully aware there was a problem in the financial sector and the banking sector.”

He also stated that in the same 2015, he pointed to the previous government that about eight banks would collapse but they ignored it.

“There were such bad practices of governance and the management of these institutions and we had to step in. Most of the banks were set up without any capital, they just lied their way of setting up the bank. They moved money from one place, showed it to the Central Bank, the Central Bank gave them the license, then they moved the money out,” he said.

Dr. Bawumia added,” They were using Central Bank’s liquidity support for other purposes, rather than reviving these banks, It does not make sense.”

He also stated that the collapse of financial institutions did not start with the NPP administration but started under the John-Mahama administration, saying that under the NDC, 82 financial institutions collapsed including DKM.

He stated that closing the financial institutions were rather to salvage the situation, saying that the institutions had almost collapsed.

“About4.6 million depositors had their monies at stake. They could lose their monies and that is why the rescue plan was executed to make sure the deposits were saved. The government had to expend 21billion to save the situation,” he said.

As at Monday, he said the liquidity has been raised to take care of savings and loans and microfinance companies, adding that the receiver will soon make payments to these institutions including DKM.

He confirmed that 98 percent of depositors have received their monies, adding that the government is putting measures in place to ensure that depositors will be paid in cash and not in bonds.

 

Source: Ghananest.com

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