Mahama’s promise to restore collapsed banks shows ignorance of financial crisis, says Bawumia

The presidential candidate of the New Patriotic Party (NPP), Dr Mahamudu Bawumia, has strongly criticised the National Democratic Congress (NDC) flagbearer, John Dramani Mahama, over his recent promise to restore the licenses of certain financial institutions that were collapsed during the NPP’s tenure.

During the NDC manifesto launch in Winneba, Mahama pledged to reinstate the licenses of financial institutions that he claims were unjustly shut down by the NPP government.

However, Dr. Bawumia, in a media engagement on Sunday (25 August) expressed surprise at Mahama’s stance, stating, “We saved the deposits of 4.6 million bank depositors who really were going to lose their deposits if those banks were not saved.”

“I don’t understand whether the former president has taken his time to understand the banking sector. Some atrocious things and this is why these banks had to be saved.”

“They were not collapsed, they were merged into other banks and no banking depositor lost 1 cedi, everybody maintained. But very bad things happened, some of the banks broke all the rules and extended loans way above the single obligor limits,” Bawumia added.

The NPP presidential candidate said, “They were given, in some cases one billion by the Bank of Ghana to help them out of the mess and they only got deeper into the situation. Other banks were given capital to save the situation, and they used that money to set up Capital Bank, instead of rescuing the problem that they had. They took the money from the central bank and set up another business which also collapsed. Some took money and invested in private properties.”

“So, it was against this background the governor came to report, and this was one of my nightmares in the last eight years. Most people didn’t understand how close we were to a collapse of the entire banking system. This is how we had to merge many of these banking sectors into other banks and we saved 4. 6 million depositors.”

He also highlighted that the restoration of bank licenses is subject to legal procedures and cannot be done arbitrarily.

“He cannot hand over a bank’s license to them, this is subject to legal procedure,” Dr. Bawumia stressed.

Reporting By Jonathan Ofori, Asaase Newsroom

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