The Minority in Parliament says the Finance Minister and the Bank of Ghana acted illegally in providing close to ¢8 billion as bailout cash to the seven collapsed banks.
The condemnation comes after government announced that ¢7.8billion of taxpayers monies was pumped into the banking sector as bailout to save the banks.
So far the seven – UT Bank, Capital Bank, Sovereign Bank, Construction Bank, Beige Bank, The Royal Bank and UniBank - have all collapsed raising concerns about the viability of the banking sector.
But the Minority is condemning government over its failure to seek parliamentary approval before doling out the cash.
According to them the provision of the funds, as well as the establishment of a new Consolidated Bank, should have received parliamentary approval but that didn’t happen.
Spokesperson on Finance Cassiel Ato Forson said the Finance Minister breached the law because he failed to seek parliamentary approval before doling out ¢7.8 billion of taxpayers money.
“The finance ministry has failed to request parliament to approve ¢8 billion, they have failed to ask parliament of Ghana for the permission to spend taxpayers money of ¢450 million to capitalize The Consolidated Bank.
“The Consolidated Bank requires an act of parliament for it to be in place, they have not done that, so all of these are fundamental breaches,” he added.
Mr Forson believes government should have considered other means of solving the banking crisis than setting up The Consolidated Bank.
An option that could have been considered, he noted was getting shareholders and other people who had taken loans from these banks to redeem their pledge of paying back.
For him, “the banks failed because of somebody’s recklessness and someone deliberately decided to hide information from the BoG.”
Chairman of Parliament’s Finance Committee, Dr Mark Assibey Yeboah disagrees with the Ajumako Enyan Esiam MP.
He says the Finance Minister has not breached any laws in the issuance of the ¢8 billion bond to protect depositors funds of the collapsed banks.
He made reference to Section 61 (1) of the Public Financial Management Act , which states that ‘the issuance of government’s debt security in a domestic market shall be by way of auction or any other method approved by the Minister’.
“So in the domestic market if the minister decides to issue a bond, he would not come to parliament, this is done on a weekly basis at the BoG through auction.
“So I don’t know why he is raising concerns in terms of the issuance of the bond,” Dr Assibey Yeboah said.
He noted that if the Minority’s concern is that the bond is a new expenditure, the Finance Minister could come back to Parliament in the course of the year, by way of a supplementary budget in the course of the year to regularise it.
“I don’t see any failings here on the part of the Finance Minister,” he added.
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