The flagbearer of the New Patriotic Party (NPP) has sharply criticized John Dramani Mahama, the flagbearer of the National Democratic Congress (NDC), for his pledge to restore the licenses of some financial institutions that were collapsed under the current government.
During the NDC’s manifesto launch in Winneba, Mahama promised to reinstate the licenses of financial institutions that he claimed were unjustly shut down by the NPP government.
In response, Dr. Bawumia, during a media briefing, expressed surprise at Mahama’s promise, arguing that the NPP’s actions were necessary to protect the deposits of 4.6 million bank customers who would have lost their funds if the government hadn’t intervened.
He pointed out that some banks had been engaging in reckless practices, such as issuing loans beyond legal limits, misusing their capital, and investing in private properties, which contributed to the instability in the banking sector.
Dr. Bawumia stressed that the banking sector was on the verge of collapse, which required the merging of certain banks to avert a widespread financial crisis.
He urged Mahama to familiarize himself with the reports from the Receiver and the Bank of Ghana before making further public comments.
“We safeguarded the deposits of 4.6 million bank customers who would have otherwise lost their savings. I’m not sure the former president fully understands the intricacies of the banking sector. Some of the practices we encountered were extremely concerning, which is why these banks had to be merged, not collapsed. Every depositor’s funds were protected, no one lost a cedi. But the situation was dire; some banks broke all the rules, issuing loans far beyond legal limits.”
“In some instances, the Bank of Ghana provided up to 1 billion cedis to help these banks recover, but they only fell deeper into trouble. Some banks misused the capital meant to save them and instead invested in ventures like setting up new banks, which also failed. Others diverted funds into private property investments.”
“This is the context under which the central bank had to intervene. It was one of the most challenging issues of the past eight years. Many people don’t realize how close we were to a total collapse of the banking system. By merging these banks, we preserved the savings of 4.6 million depositors.”
“I would advise the former president to read the reports from the Receiver or the Bank of Ghana to fully grasp the situation before making any more comments on an issue he clearly doesn’t understand. Handing back a bank’s license is not a simple decision; it involves a legal process.”