Ghana cedi on a downward spiral

by 29/09/2012 14:41:00 0 comments 812 Views

It appears the against the US dollar which is creating consternation within the business community is also revealing the inefficiency of the country’s central bank.

The commercial banks are having a field day doing whatever they chose, forcing the Bank of Ghana to issue statements denying their actions, while the obviously unauthorised actions continue.

In the first instance, the banks circulated rumours recently that the Bank of Ghana was about to issue directives that all foreign currency accounts should be converted into cedi accounts.  Bank customers on hearing the rumour moved out their foreign currency holdings.

Indeed, some of the commercial banks started issuing bizarre orders to their customers insisting that customers who deposited dollar cheques into their foreign currency accounts would not be allowed to withdraw cash, but instead they should issue cheques for their transactions.

The rumour went on for a whole week, before the Bank of Ghana issued a statement to deny it was in the process of issuing any such directive.

And at the time the rumour was gaining grounds, two of the three governors were said to be out of town attending meetings – the one at post was unable to step in to save the situation, until the commercial banks had struck enough fear into their customers whose only insurance was to withdraw their foreign currency deposits from the banks.

The yet to be subdued global economic crisis which began in 2008 started from the banking system. The Eurozone crisis is also linked to conducts of the banking sector in that zone.

Today July 2, 2012, the Chairman of Barclays Bank, UK, Marcus Agius has been forced to step aside when it was discovered that the bank was engaging in interest rate racketeering.

Last week British regulatory authorities fined Barclays £290m for attempting to manipulate the Libor inter-bank lending rate.

The Bank of Ghana has a supervisory unit that should be on top of issues but it is not. A Nigerian bank that was once operating in Ghana was able to hide its loses for two consecutive years and yet the central bank did not find out.

There has been a case of another Nigerian banker in Ghana who deposited counterfeit US dollars into the central bank’s vault. Mr. Oluwale Ajumale was reported to have done the fake currency lodgements between late 2008 and 2009 even though the Bank of Ghana warned him in late 2007.

Mr. Ajumale who was the Managing Director of AmalBank was also reported to have made direct transfers of funds abroad in settlements of goods up to $25,000 contrary to central bank regulations and procedures.

He was eventually sacked in 2009.

The Bank, this afternoon July 2, 2012 has issued another statement denying that it has issued any directive to the commercial banks to impose fees and charges on foreign currency accounts. But some bank customers insist they are already being charged these fees by the banks!

A customer of one of the banks whose bank has written to him quotes a portion of the communication on Facebook. “..AS PER DIRECTIVES OF THE CENTRAL BANK..”

“One bank is charging 0.15% another 0.22% and still another graduated $5, $10, $15 etc. depending on your balance effective June 30, 2012. How come all the banks choose to do same at the same time. BOG should tell them to stop. Or since the charges are different, the BOG has given a different directive which has been interpreted by the banks in that manner. Someone should please come again,” he writes.

While it is known that there are professional bankers working at the central bank who would not sacrifice professionalism for anything, so many things are happening within the country’s banking sector to cause concern to all bank customers and the economy as a whole.
The central bank must be up and doing and should enforce the banking laws of the country instead of acting like a toothless bulldog before the country is hit with any economic setback as it is happening in the developed world.