CAL Bank Managing Director fights Ghana’s President, Akufo Addo’s proposal to reduce interest rates, here’s why

The outgoing Chief Executive Officer of CAL Bank, Frank Adu Jnr, has predicted dark times for Ghana’s banking sector should government legislate the lower interest rates the president directed.

CAL Bank Managing Director fights Ghana’s President, Akufo Addo’s proposal to reduce interest rates, here’s why

President Addo Dankwa Akufo-Addo has raised concerns over the high-interest rates in the country warning it jeopardizes the cost of doing business in the country.

He, hence, directed the Bank of Ghana Governor, Dr Addison to take a second look at rate.

But Mr Adu Jnr explained that a cap on interest rates could spike up rates beyond the recent levels of 15 to 25 per cent.

He said this while speaking at Cal Bank's Fact Behind the Figures forum.

“You cannot cap interest rates. From a political perspective, you can attempt but you will pay the price. If interest rates are high, it is not the doing of banks. Banks do not manage an economy. Interest rates reflect the economy that you have created. We can attempt that…as they did in Kenya and see what happens,” he said.

Adding that “We’ve seen it in this country before– credit ceilings, interest rate cups – we paid a price eventually there was a blow-out, interest rates went out to 42-46 per cent. Good management of the economy will drive what interest rates will do. High-interest rates are not the doing of the banks in any circumstance.”

The CEO, who retires on December 31, further argued that despite the clean-up in the banking sector and pegging of the policy rate to 16 per cent, the banking sector still responds to inefficient regulatory and legal frameworks that sometimes impede retrieval of securities.

Mr Philip Owiredu will assume the Chief Executive Officer position on 1st January 2020, following the retirement of Mr Adu Jr.

JOIN OUR PULSE COMMUNITY!

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Amazing transformation of 21-year-old man bullied for being born different (video)

Amazing transformation of 21-year-old man bullied for being born different (video)

Sonko’s reaction as daughter Sandra Mbuvi goes international

Sonko’s reaction as daughter Sandra Mbuvi goes international

Eliud Kipchoge's special Sh20,000 earphones he can't live without

Eliud Kipchoge's special Sh20,000 earphones he can't live without

Abel Mutua's movie makes over Sh4M in 5 days

Abel Mutua's movie makes over Sh4M in 5 days

Vera imports Baby Diapers from US, Help rebuild Boniface Mwangi's house & other stories on #PulseUhondoMtaani

Vera imports Baby Diapers from US, Help rebuild Boniface Mwangi's house & other stories on #PulseUhondoMtaani

Sh79,000 per month jobs for Kenyans without degrees

Sh79,000 per month jobs for Kenyans without degrees

Davido and Chioma spotted together for the first time since rumoured breakup

Davido and Chioma spotted together for the first time since rumoured breakup

How Janet Mbugua's husband Eddie landed Sh240 million deal with Chinese investors

How Janet Mbugua's husband Eddie landed Sh240 million deal with Chinese investors

5 things you should never do to please a woman

5 things you should never do to please a woman