CAL Bank has expressed displeasure about the new directive of the Bank of Ghana (BoG) to banks to write-off loans after six months of being rated as “loss.”

According to the bank, the directive is unrealistic and would have repercussions on the banking sector, appealing to BoG to review the directive.

Philip Owiredu, Executive Director of CAL Bank, who was speaking in an interview with BUSINESS GUIDE at the Fact Behind Figures session in Accra, said the BoG intends to use the directive to reduce non-performing loan ratio.

He said the directive would not help to increase loans within the banking sector.

Being able to recover loans through the court processes in time would ensure that clients adhere to debt obligations and pay up in order to reduce the non-performing loan ratio, Mr. Owiredu said.

The last resort to recovering a loan is the court but its takes as long as four years to go through the process and recover the money, he indicated.

Mr Owiredu said, “If you look at the recovery process in any bank, if a loan is non-performing you try as much as possible to come to some sort of terms with the client to be able to recover the loan.”

He urged BoG to come out with measures that would ensure that banks recover loans offered to clients.

Mr. Owiredu said the management of CAL Bank had strengthened the bank’s risk management process in response to current economic crunch.

He said risk managers and business units had enhanced monitoring and reporting on identified risks.

Mr Owiredu said the total assets of the bank, which grew by 56.9 percent year-on-year was largely supported by a 151.2 percent growth in investment in government securities with total volume on loans and advances increasing to GHc591.8 million.

He said customer’s deposits increased by 25 percent and was driven by targeted deposit mobilization efforts of the new branches and deepening of relationship with existing branches.

The bank recorded 45.9 percent in profit after tax.