The sector is still licking its wounds from last year's sanctions on the two banks, and now another bank has been sanctioned directly by the central bank, Unibank (It was adjudged the 6th best performing company in Ghana at the Ghana Club 100 awards in 2017). The country's Central Bank has announced that as of March 20th, 2017, it has mandated and authorized the management of Unibank (a privately owned bank) to be dissolved and taken over by KPMG. Interestingly!
The Bank of Ghana now requires some housekeeping. It is completely unacceptable to be in charge of a sector in which a player is ranked sixth best only to be accused of withholding vital information. The Central Bank, on the other hand, has a defense for the action against Unibank in that the bank has consistently maintained a capital adequacy level ratio close to zero, which could imply Unibank is insolvent. According to reports from the Central Bank, it directed Unibank to stop making new loans to customers; however, the bank ignored the directive and continued to make new loans. Furthermore, Unibank was directed to refrain from incurring any additional capital expenditures, which they (Unibank) did not comply with, thus violating section 105 of Act 930.
If one observes Unibank's banking activities over the years from a distance, one will notice that the Central Bank and KPMG guide to the bank should not dissolve their positive employee-customer culture, which is readily seen to be """"vibrating"""" among their customers and bank. Unibank has a lot of loyal customers, many of whom are traders. As a result, the Bank of Ghana should guide Unibank, taking into account the existing brand and identifying obvious ways to revitalize the bank.
Having said that, the number of Universal banks in Ghana is far too high. The number should be limited because having nearly 40 banks for a population of 26 million is obviously excessive. What needs to be done is to increase existing banks' capacity to """"branch out"""" to customers. This can be accomplished in two ways: by expanding physical infrastructure to get closer to customers and by expanding digital infrastructure (online/mobile banking). Existing banks should focus on improving customer service, getting closer to people, expanding digital banking options, and strengthening banking security.
To be clear, I am not opposed to bank registration; in fact, my position is the polar opposite, as I recognize the importance of financial services to individuals and the economy as a whole. My position is the polar opposite. Instead of registering new banks, some of which operate a few branches with no superior services or infrastructures, I believe it would be better to resource existing banks to improve their capabilities.
Finally, some of these financial institutions will have to consider merging if they are to remain profitable and serve customers to standards as the sector becomes more competitive in the coming years, especially now that the Central Bank has increased the minimum capital requirement for banks to 400 million Ghana Cedis, which will take effect in December 2018."""
