[ 2016-07-15 ]

Government's indebtedness collapsing 11 commercial banks
Some 11 Commercial Banks in the country could soon
fold up if steps are not taken to clear the huge
debts owed them by some state-owned institutions.

A Majority of the banks that could be collapsing
as a result of this development are reported to
local banks.

This issue came up in October 2015 after two of
the accounting firms commissioned by the
International Monetary Funds (IMF) to measure the
current status of the banks in the country made
some recommendations.

Chief among them is that steps should be taken to
recapitalise these banks to prevent them from
going under.

Finance Minister, Seth Tekper in a recent
interview with the Daily Graphic noted that for
instance, the IMF is demanding work to be
completed on a strategy to recapitalise some of
these banks.

As part of what Mr Terkper describes as new
conditions, the Funds is pushing before the
executive board of the Fund meets to review
Ghana's performance under the program.

For some industry analysts and banks that JOY
BUSINESS has spoken to, they say the challenge has
come about after some state institutions
especially those in the energy and power sector to
pay loans granted to them on time and even some
private firms that have rendered services to
government but have not been paid.

Some financial analysts also intimated that they
find this development interesting following recent
report by the Bank of Ghana (BoG) that commercial
banks in the country are in a sound position
following two stress test carried out.

Some state institutions also argue that they are
not able to pay these loans because government is
owing them.

Another group of another say even if these banks
do not go under, the development could result in
interest rates shooting through the roof as some
banks try to pass on the delays in paying these
loans to new borrowers.

Source - Myjoyonline.com

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