Question

Over the last few months, the Bank of Ghana (BoG) has cracked the whip at the banking industry in a bid to restore sanity in the industry. In August 2017, the UT and Capital Banks were liquidated for failing to meet the BoG’s minimum capital ratio. The operations of UniBank, Royal Bank, Beige Bank, Sovereign Bank, and Construction Bank ended. In their place the BoG announced a new bank called the Consolidated Bank, as part of measures to ensure the banking sector maintains a strong indigenous presence.
loans, and weak corporate governance which compelled BoG to crack the whip.
REQUIRED:
As a manager of a bank that was not closed down, what measures will you put in place to ensure that your bank will not be caught up in the same situation as the collapsed banks?

Answer 1

As a manager of a bank that was not closed down, I will take following measures in order to ensure that my bank would not be caught up in same situation as the collapsed banks-

A.I will ensure an optimum corporate governance is present in my overall organisational structure that is efficient enough to detect any kind of functional deficiency.

B. I will try to maintain a good quality of my assets so that they have complete recovery power even in the time of the crisis.

C.I will try to cut upon unnecessary risks so that my exposures to the risky assets would be limited and it would be advantages for bank in following with the regulatory requirements and facing up with adverse economic scenarios.

D. lending should only be based upon the past performance and creditworthiness of the borrower and it should never be based upon any kind of personal biasness.

E .Ensuring complete adaptation to the regulatory framework and acting in the interest ofof the stakeholders.

F. Following up with the monetary policies and disclosure requirements of the regulatory authority.