Collapsed banks in Ghana recovered only $142 million out of $2 billion loans, Bank of Ghana governor reveals

The Governor of the Bank of Ghana, Dr Ernest Addison says out of the $2 billion (GHS10.1 billion) worth of loans taken by the receivers of some nine banks which collapsed in the country, only $142 million (GHS731 million) has been received.

The Governor of the Bank of Ghana (BoG), Dr Ernest Addison

The nine banks were UT Bank, Capital Bank, Sovereign, Unibank, Construction Bank, The Royal Bank, Heritage Bank, Premium Bank and Beige Bank.

According to him, 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 $2 billion (GH¢10.1 billion) taken over by the Receivers, total recoveries so far is in excess of $142 million (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 income sources. Loan repayments by customers constitute about 72 percent of the total proceeds realised,” he noted.

Mr Addison made the revelation while speaking at the opening of the Ghana CEO Summit in Accra.

He noted 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.

He then noted that some of the assets of the receivers 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.

The governor, however, revealed 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.

“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,” he said, adding that, “Without an efficient judiciary system that is prepared to deal with cases in a swift and decisive manner, all the work done in sanitising the banking system will not yield the desired results or expected outcomes.”

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