Ban Savings And Loans Companies From Dealing With Their Owners And Promoters

It is heartening that the Bank of Ghana (BoG) is now being proactive in protecting the public from the wiles of the worst entities  in the microfinance sub-sector of Ghana's financial services industry.

It is also important that the BoG starts taking active  steps to protect the public from the so-called tycoon-owned-entities-awaiting-universal-banking-licenses, without exception.

The question there is: How will the BoG ensure that there are strict regulations in place - with heavy penalties including being banned for life from being company directors in Ghana - to prevent any egregious actions and inactions by the tycoons who own savings and loans companies, and the managers in their employ, which could endanger the cash deposists of account holders?

Above all, the BoG ought to prevent other businesses owned by the promoters of tycoon-owned-financial-services-entities (TOFSE), from being being exposed to those selfsame tycoon-owned-entities - many of which are in fact currently awaiting universal banking licenses.

In other words, to ensure the safety of depositors' monies with them, and compliance with regulatory edicts, such tycoon-owned financial services sector entities awaiting universal banking licenses, should neither be allowed to take deposits from their owners and promoters personally (ditto their other businesses also), nor be loaned  depositors' monies personally as well as their other businesses too.

Such simple measures by the BoG will prevent the wealthy individuals who establish such savings and loans companies - intended to be turned into universal banks eventually - from being routinely granted huge loans in their personal capacities secretly (and secretly to their other businesses), off the books of TOFSEs, thus jeopardising their long-term stability and putting at risk the cash owned by depositors on top of that banking sin too.