President of the Ghana Association of Bankers (GAB) and Managing Director of Stanbic Bank Ghana, Mr. Alhassan Andani has said the banking sector will weather the storms posed by the global pandemic.
In an interview on Joy News, PM Express Business Edition Show on Thursday, March, 26, 2020, he said it was too early to say there was a negative impact of the coronavirus on the banking sector.
He justified his comments after shooting down claims made earlier on depositors’ attitude of panic withdrawals among others due to the global pandemic.
“It’s absolutely too early. In fact, I can tell you, as of business yesterday, (March 25, 2020) none of these has happened. Not within our enterprise and over the couple of days, literally everyday for the last week, the Ghana Association of Bankers, we have been on a close call together just monitoring the situation, none of that has happened.”
In supporting his earlier stance, he stated that as the banking industry, it has made available support systems to sustain and minimum services to keep the dying needs of their clients running.
“As an industry, we are essential and critical when things come to a crunch. We have to be available to provide minimum services, paying services to ensure that, money can flow and people can get essential services, so we will continue to do that,” Mr. Andani stated.
The impact over a long period of time
However, Mr. Andani has said in a long run, it will impact the sector in several ways since businesses will be affected as well.
He made reference to business volumes going down with GDP also going low significantly which will compel businesses to take action to protect their entities.
“Business volumes have gone down and GDP is reported to contract significantly. If that happens, it will certainly impact us. You know, companies have to pull back, even in some cases, shutdown operations just to keep their people safe. That’s why I said its early days.”
In addition, Mr. Andani said the current economic situation has rather, drawn cautiousness on the side of customers and clients regarding their businesses and spending habits.
“It is a deadline, it’s a very sad time. But it has probably made the people-agenda even much more, so to the extent, all people can’t even attend to their businesses which is going to lead to contraction, is certainly going to impact business dawn activities which is what drives banking activities.
What is the biggest challenge for banks?
In responding to some challenges facing the sector, he laid emphasis to the fact that, customers are unable to fulfil their part of promises regarding loan repayments.
According to Mr Andani, he said the biggest currency for Banks is trust since they will need clients fulfilling their side of the bargain when it comes to borrowing.
“So, the biggest problem we have is the clients holding their side of the bargain which is those who rightfully contracted the loans should come and pay so that we can also repay the government and our regulator for the interventions they give to us. So, I think for us, trust is the biggest currency for banks is trust. We will not do anything to undermine the confidence that our clients have put into us,” he said.
Conclusively, the president of GAB further gave an assurance that the banking sector will at all cost, sail through the trying times the country find itself in as a result of pandemic.
