The only way confidence can be restored in the country’s financial sector is for the Bank of Ghana to act with fairness and firmness in applying the law to all those found complicit— including its own staff— in the collapse of seven indigenous banks, Lawyer Godwin Adagewine, a law lecturer at the University of Professional Studies, Accra, has said.

When the central bank collapsed and merged five local banks last week, it cited obtaining banking licences under false pretence as among the reasons for revoking the licences of three of the banks—Beige, Construction and Sovereign.

But in an interview with the B&FT, Mr. Adagewine said there are suspicions that some officials of the Bank of Ghana were compromised in the processes leading up to issuing licences to the banks; hence, a proper investigation must be undertaken to bring out the truth and punish officials found culpable to serve as a deterrent to others.

“There are certain things that the Bank of Ghana can do with regard to investigations and supervision. Some people are suggesting that, somehow, some officials of Bank of Ghana were compromised into accepting wrong documentation rather than rejecting them. What the Bank of Ghana can do is to seriously punish those officials if such is indeed the case.

“It is really impossible to ensure that these things do not happen unless we punish those who went wrong. So, my view is that directors and managers who are found guilty should be punished severely so as to deter others in the system from repeating similar actions,” he said.

He added that it is only after carrying out this action properly that lost confidence in the banking industry can be restored.

“The Bank of Ghana must act in the way that the law requires it to act, and this will bring confidence back into the system. In fact, that is the only way confidence in the financial sector can be restored; otherwise, it is near-impossible to restore the lost confidence,” he said.

Lawyer Adagewine is not the only one calling for heads to roll at the central bank and at the collapsed banks, as the incident has come at some GH?8 billion cost to the economy.

The Trades Union Congress has also in a press release signed by the Secretary-General, Dr. Yaw Baah, called on the central bank not to treat with kid-gloves any official found complicit in the banks’ collapse.

“To prevent repeat of the irregularities, including regulatory and supervisory failures that have led to the current situation, it is important that the activities which have led to the current banks-collapse and necessitated what is perhaps the biggest bank bailout in Ghana’s history must be properly investigated and those culpable punished in accordance with the laws of the land,” the statement said.

The central bank has announced that a GH¢5.7billion bond will be issued to finance the gap between liabilities and assets of the five consolidated banks— after already doling out a GH¢2.2billion bond to settle the liabilities of UT and Capital Banks: the first two banks to go down.