To think that indigenous banks should be allowed to wallow in their despondency as the December end minimum deposit with the Bank of Ghana (BOG) beckons, is to marginalize the many advantages they bring to bear on small businesses and above all, their long-term strategic importance to our national interest.
We would be putting a lot of the inroads we have made in the economy at risk if the authorities allow these banks to suffer the impending Armageddon in the banking sector without halting it.
Unless calm heads prevail and the BOG is ordered to rein in their horses, the December end deadline for these small banks to meet the minimum GH¢400m deposit with the apex bank, thousands of Ghanaians are going to lose their jobs. The aggravation of an already worrying unemployment situation can only be conjectured under such circumstances. This is regardless of whatever interventions such as mergers and the like, that are introduced to address the fallouts.
The President’s stance that whatever transformation is being considered in the financial sector, indigenous banks should be spared anything which could spell their doom; should be in the sight of the BOG as it considers its options. If the President’s subtle admonition is not enough caution to the regulator, we do not what else is.
So much has been said in the form of commentaries about this subject including a petition by an association of the universal banks to the President although no response has come yet.
Whatever factors informed the BOG decision cannot be brushed aside as much as the case for supporting the indigenous banks or even listening to them.
An extension of the period is all they demand and in our view, the regulator should oblige them this important favour whose advantages have national security implications in the long-run.
The indigenous banks hold a special place in our national interest setting. Unlike their foreign counterparts, their earnings remain here. The importance of retaining such foreign monies locally is too obvious to require repetition here. Suffice it to point out that such repatriation of foreign exchange to their home bases by the foreign banks is a factor in the depreciation and often fluctuation of the strength of our currency.
The role of these banks in providing specialized assistance to petty traders and others who would have otherwise not banked, is enormous. This has added greatly to encouraging more and more Ghanaians to bank: the leverage this development has visited on the economy beyond disputing.
The indigenous or universal banks have brought novelties in banking which have enamoured them to the small time traders in the markets who have turned to banking and even drawing credit facilities; something they would not dream of at the foreign banks.
Must we be frenetic in the application of regulations as to wash away the gains made already in the operations of these banks? Some institutions must be allowed to stay no matter what and our local financial institutions fall into this category because of the inherent long-term leverages.
The programme in banking and finance across the country’s tertiary institutions would not have registered the current all-time high in demand but for the job openings in indigenous banks. One of the fallouts from a BOG sledgehammer on the banks under review, is a natural constriction of demand for the programmes and trickling consequences on the economy somewhat.