President Nana Akufo-Addo has said a total of GHS12.7 billion of taxpayers’ money, was pumped into the seven local banks which eventually went under.

The seven banks went bust within a space of one year – from August 2017 to August 2018.

They include UT Bank, Capital Bank, uniBank, Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank.

The first two went under in August 2017.

The other five went bust two weeks shy of a year after the first two failed.

UT Bank and Capital Bank were taken over by GCB Bank while the last five were put together by the Bank of Ghana to form the all-new Consolidate Bank Ghana Limited (CBG).

It is estimated that about 2,000 staff will be retrenched.

Speaking at the 80th anniversary celebratory durbar of one of the country’s finest secondary schools, Presbyterian Boys' Senior Secondary School, Legon, about the work of the central bank in purging the sector, Nana Akufo-Addo, who is on a four-day tour of the Central Region, said: “Under the rigorous leadership of the current Governor of the Bank of Ghana, Dr. Ernest Addison, a number of prudent measures have been taken to save and sanitise the banking sector”.

“To protect the deposits of the seven defunct banks, the government, through the Ministry of Finance”, the president noted, “has had to issue bonds to the tune of some GHS8 billion in favour of GCB Bank and the new Consolidate Bank Ghana Limited – the banks that have taken over the operations of the seven failed banks.

“This is in addition to liquidity support of some GHS4.7 billion that had been provided by the Bank of Ghana to these banks over a period before their closure.

“In fact, GHS12.7 billion of public funds has been injected into these seven banks following their malfunction. Depositors’ savings, however, have been safeguarded; job losses have been minimised and a strong set of indigenous banks, is being born”, the president asserted.

In the president’s view, “…It is better to have two performing indigenous banks than to have seven weak ones, as recent examples of Nigeria, Malaysia and others, have shown.

“I have no doubt that if these measures had not been taken, the banking system would have been seriously compromised with dire consequences for depositors and their savings”, he noted.