The outgoing Managing Director of the Republic Bank Ghana has urged commercial banks in the country to consider taking legal actions against loan defaulters.
According to Anthony Jordan, this has become necessary to reduce non-performing loans on their books.
He was speaking at a Retirement Farewell Function in his honour in Accra.
He said, “One of the greatest challenges we’ve had is that we’ve had some legacy loans that went away bad; customers refused simply to repay the loans.”
Mr Jordan added, “In the long run, if we realize that there’s dishonesty involved we need to resort to legal action and realization of our security to recover the banks’ money.”
According to the latest release from the Bank of Ghana, asset quality in the banking sector improved following the enforcement of the loan-write off directive issued in June 2018.
Consequently, non-performing loans declined to GH¢6.7 billion in December 2018 from GH¢8.2 billion in December 2017, representing 18.9 per cent contraction against a 33.4 per cent growth recorded a year ago.
In his keynote address, Governor of the Bank of Ghana, Dr Ernest Addison, lauded the Republic Bank for being among the first banks to meet the current minimum capital requirement.
“For me, it was no surprise when Republic Bank was one of the first banks that met the GH¢400 million minimum capital requirement; they were very supportive of the policy and understood what we were trying to achieve,” he said.
On his part, Minister of Works and Housing, Samuel Atta Akyea reiterates his commitment to seek a portion of the pension funds from SSNIT to provide mortgage arrangements to pensioners.
He said, “It’s a wonderful idea that you can’t do serious affordable housing without regards to leveraging on the pension fund and these are matters we are still talking about. Whether we want people to retire and they give them coins at the end of the month as the pension stipend and they live in a family house which was bought by one successful cocoa farmer long dead or the workers of Ghana are ready to say let’s affect the pension fund and let’s leverage on it and finance housing and create a mortgage arrangement.”
Farid Antar is to take over from Anthony Jordan as new Managing Director of Republic Bank Ghana.
Mr Antar has expressed commitment to moving the bank to become a tier 2 bank in the years ahead.
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