An associate professor with the Department of Finance at the University of Ghana Business School, Lord Mensah has welcomed the assurance given by former President John Dramani Mahama to restore licenses of some banks that were “unjustly” revoked during the government’s financial sector reforms.
The clean-up initiative, overseen by Finance Minister, Ken Ofori-Atta from mid-2017 to January 2020, resulted in a reduction in the number of banks from 34 to 23.
Additionally, 347 microfinance institutions, 15 savings and loans companies, and eight finance houses had their licenses revoked.
In response to the former President’s assurance, Prof. Mensah welcomed the acknowledgment that bank collapses are not a necessary part of a clean-up process.
He recalled previous discussions where concerns were raised about the detrimental economic consequences of dismantling the existing financial architecture and noted that these concerns had unfortunately materialized.
“I think the former President who is seeking office again may want to take into consideration the social dimension of the existence of a bank.”
“We need to also note that there is a difference between holding a banking license and operating a bank. Restoration of licenses is not the same as operating a bank, that is something we should note”, he told Citi Business News.
Highlighting the social dimension of banks, Professor Lord Mensah urged the former President, who is currently seeking office again, to consider the broader impact that banks have on society.
Furthermore, the professor emphasized the distinction between holding a banking license and actively operating as a bank.
“And then again, some of these banks genuinely had their licenses revoked by the law court. Those once were found to be engaging in criminal activities. Those ones I do not think the former President can do anything about them,” he added.