Dr. Richmond Atuahene, a banking consultant, claims that the domestic debt swap scheme has exposed Ghanaian banks' slack practises in banking.
According to him, the majority of banks overindulged in lending to the government over their single obligor limit after succumbing to the misconception that government securities were risk-free.
He pointed out that the Central Bank, which was to raise concerns about the practise, had been engaging in similar activities to a significant degree.
He claims that as a result of the debt swap scheme, several banks are now in risk of going bankrupt.
"As I talk to you, a bank has a bond portfolio of $9 billion compared to a loan portfolio of $4 billion. The bonds are twice as large as the loans because when I stated it about When I spoke at the Kempinski two years ago, I remarked that we were engaging in what is known as lazy banking.
"Lazy banking," in the sense that we seek an easy route out of banking, is not banking. Buying government bonds and treasury bills, declaring good profits and revenue, and paying nice dividends are not banking. Not banking, that. The way the British colonial rulers taught us about banking was not in this manner. Banking should be subject to strict control for both investments and lending facilities, but this was not mentioned.
"So the banks think it's a simple process. And let me let you in on a little secret: when they saw these bonds, several banks from other jurisdictions almost pulled out. Instead, they phoned their board.
They informed them that they were terrified of what they saw as they were heading into the location.
"Some of them warned them, the local banks here were alerted by some of the mother businesses. But the issue is: How did we get here? Easy banking and lazy banking were made possible by the climate that was established, he continued.
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