Various reasons have been found as the source of bank failure in Ghana; 6 reasons among these several reasons include Lack of corporate governance and Bad loans.
Other reasons why banks fail in Ghana include the following:
- Inefficient regulatory practices
- Fake licenses process
- Low capital base
- Poor credit risk.
The solution to restoring the banking sector from these six cancerous roots are following:
- The Central Bank of Ghana should ensure all the banks in Ghana have a specific amount of capital to run their banking services to avoid undercapitalization.
- All the banks should ensure they carry out a necessary credit risk analysis before discharging credit to customers.
- The Central Bank of Ghana should make the licensing process open and fair while putting heavy sanctions on banks with fake licenses.
- The Central Bank of Ghana should also check the bank operations report periodically to know if they are working under established standards.
- All the Banks in Ghana should be encouraged and mandated to operate based on established corporate standards.
- Banks in Ghana should always access the loan or lending operations to manage their capital very well.
Hence, in this case, the Bank's failure in Ghana can be redeemed if the proper strategies are in place.
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