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 per cent 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.
Meanwhile, in a related development, Governor of the Bank of Ghana wants the judiciary to allocate special courts to specifically handle cases related to the recent banking crisis.
Dr. Ernest Addison acknowledged the “crucial” role of the judiciary to efficiently adjudicate financial sector cases, but was not impressed with how the cases are being dragged.