The Ghana Trades Union Congress (TUC) has welcomed a recent consolidation of five struggling banks by the central bank but has warned against possible job losses.
The labour union says the decision by the Bank of Ghana (BoG) to consolidate five indigenous banks into a single entity due to breaches of banking regulations is good for confidence in the banking sector.
“We welcome the establishment of the Consolidated Bank. The Consolidated Bank gives us the confidence that depositors’ funds are safe. Any loss of funds will considerably damage the confidence in the banking sector which can have very serious consequences for the entire economy,” TUC General Secretary, Yaw Baah, said in a press statement issued in Accra.
The central bank put down its foot two weeks ago and announced the creation of Consolidated Bank Ghana Ltd to take over the five erring banks.
Apart from breaching BoG regulations, the five banks, Sovereign Bank, Royal Bank, The Beige Bank, Construction Bank and Unibank, according to the central bank, have also run into liquidity challenges.
The government has made GHS450 million available for the Consolidated Bank as starting capital and has named Daniel Addo as its CEO.
Although the move has been praised by some financial analysts, others have also expressed fear about possible job losses.
Although the Governor of the Bank of Ghana, Dr Ernest Addison, stated during the shocking announcement of the consolidation that “all staff of the affected banks will become staff of the Consolidated Bank, we do not expect any immediate job losses as a result of this consolidation,” the TUC fears job losses are still possible.
“Given the current state of joblessness in the country, it is important that developments in the banking sector and the measures being taken to address them do not add to the huge unemployment challenge. We urge Bank of Ghana to do everything in its power to safeguard all the existing jobs,” TUC said.
The TUC also joined calls for a probe into the activities of banks that led to their eventual collapse.