Professor John Gatsi, a Senior Lecturer at the University of Cape Coast has called for adequate education among the banked population as a key measure of restoring confidence in the banking sector.
Restoring confidence in the sector according to him would allow savers and investors to continue working with the banks and enable the banks to have liquidity for a robust financial economy.
Professor Gatsi at a Lecture organised by the Takoradi Learning Centre of the Ghana Institute of Management and Public Administration said, “let’s leave monies that we do not immediately need at the bank, we should not also rush in making any panic withdrawal as the BOG continues to sanitise the industry of the benefits of the Ghanaian economy”.
The Lecture on the topic: Financial Sector Crisis: Issues and Solutions brought together students of the Institute, Staff from the banks and insurance institutions within the Metropolitan Assembly to deliberate on the subject and profess some practical solutions to the matter.
He noted the need for the fortification of the micro finance sector to serve the rural needs in Banking and said the financial intermediation role of the banks was what sustained the economy and must therefore be harnessed properly for Ghana’s growing financial economy.
The Two main Discussants: Professor John Gatsi and Mr. Emmanuel Akrong, a Ghanaian Economist based in Canada all agreed that there was a serious sector crisis that the regulatory agencies must be firm on resolving.
These crises are evident in the reduction of banks from 34 to 23, a 30 percent significant reduction.
The Banking sector mishap hub according to them started some where in 2013 and no wonder in 2017, ’13 banks have gone down the drain’.
Mr Akrong attributed the crisis in the banking sector to fragmented bodies regulating the activities of the sector and prayed for a centralised institution to manage issues with regards to the sector.
Mentioning the Menzgold saga as an example, Mr. Akrong said if there was proper coordination and centralised authority to look into the banks of such charlatans, most of the financial sector could have been avoided.
The financial sector is made of 85 percent, if banks and the 15 percent shared among Pensions, Asset/wealth management and Insurance.
Mr. Akrong said, ” I started ringing a bell of crisis since 2013 on the problems of asset quality and corporate governance, major issues affecting the effectiveness of the sector ” and Corporate governance failure could not be left out in all situations and stressed the need to manage the linkages well to avoid any mishaps.
Meanwhile, Auditors have also been blamed for the unfortunate incident in the sector.
According to the discussants, whiles they continually presented a good financial report about some affected banks, in reality things were not as rosy as projected and ” auditors must be stringently regulated through a professional body, with license to practise and which can he revoked in an unfortunate situation”.
The team proposed independent auditors to be watchdogs of those auditors to ensure improved performance.
Some of the participants also kicked against the selection of auditors by the Boards of the Banks as the practice did not allow their security to perform their duties.
According to a Contributor, allowing the board of banks to appoint auditors was for them to do their masters bidding and cover up on institutional failures sometimes.
Another recommendation that came up was the establishment of a financial Council and a comprehensive coordinating body to regulate the financial sector.
Others were of the view that polarisation of the banking sector must be done in conformity with law and principles governing the sector or better and reduce financial institutions to care for the needs of all.
Professor Philip Duku Osei, Deputy Rector of the GIMPA said the escalating tensions and upheavals characterising the sector in the last three years called for interest among academia to tease out what was wrong and what could be done to improve the sector.
He said it was for that reason GIMPA as a renowned Management Public Administration Institute took the bold initiative to assemble great brains to deliberate on the financial sector crisis in Ghana.