Governor of the Bank of Ghana, Dr. Ernest Addison, has revealed that out of the GHS10.1 billion loans taken on by the receivers of the nine banks, only GHS731 million has so far been recovered.
Dr. Addison said the receivership process has been painstakingly slow with other loan defaulters and shareholders of the defunct banks engaging in frivolous legal cases to sabotage the process.
“The process has progressed slowly as out of the total loans of GH¢10.1 billion taken over by the Receivers, total recoveries so far is in excess of GH₵ 731 million and this has been achieved through loan repayments by customers; repayment of placements; sale of vehicles; liquidation of bonds; and from other incomes sources. Loan repayments by customers constitute about 72 percent of the total proceeds realized,” he said.
The Governor, who was speaking at the opening of the Ghana CEO Summit in Accra, further added that the work of the receivers is compounded by the fact that some of the failed banks had insufficient or non-existent information covering some of the loans granted.
“Low or poor documentation has also made it difficult for the Receivers to identify and pursue some of the loan defaulters due to insufficient or non-existent information,” he said.
Investigations by the receivers, he noted, have also revealed that some of the assets were not registered in the names of the specific financial institutions but in the names of related or connected parties, making it difficult to dispose of the underlying collateral to offset the outstanding loans.
“Some of these loans were even fictitiously created and the directors are being pursued to recover such monies,” Dr. Addison noted.
Seeking legal redress
Currently, it is estimated that there are about 50 cases pending before the courts relating to the recovery of certain assets and monies from some of the shareholders, directors and other loan defaulters of these erstwhile institutions.
“In my opinion, designating special courts and judges to adjudicate matters relating to specific issues arising out of the Bank resolutions and revocation of licenses given the public interest, and the enforcement of collateral agreements will help speed up the process.
Without an efficient judiciary system that is prepared to deal with cases in a swift and decisive manner, all the work done in sanitizing the banking system will not yield the desired results/ expected outcomes,” the Governor stated.
The Bank of Ghana over the last two years withdrew the licenses of nine banks placing them under receivership. The first two banks affected by the reforms were UT and Capital banks which were put under the receivership of Vish Ashiagbor, Senior Country Partner, PwC.
The other seven banks, Sovereign, Unibank, Construction Bank, The Royal Bank, Heritage Bank, Premium Bank and Beige Bank were placed under receivership of Nii Amanor Dodoo of KPMG.