President Akufo-Addo
PRESIDENT Nana Akuffo-Addo says 98% of depositors of the resolved microfinance, savings and loans companies have received their money.
In an interview with Koforidua-based Sunrise FM during his recent tour of the Eastern Region, the President indicated that the intervention of the central bank was timely, especially since it protected the savings of depositors whose banks went into receivership.
He said the situation of the banks was dire and if government had allowed the financial institutions to utterly sink, depositors’ funds “would have gone up in smoke.”
Noting that there was still a balance to be paid to unserved depositors, he said the Receivers, NEPA and other institutions were working seriously to ensure that by the end of August, all depositors would be settled.
In 2019, the Bank of Ghana (BoG) embarked on a clean-up of the financial sector and revoked the licences of some banks, microfinance companies as well as savings and loans companies.
The exercise resulted in the loss of jobs and a lockup of depositors’ funds.
Government has indicated it is bent on paying depositors 100 per cent of their locked up funds once these were verified.
Vice-President, Dr Mahamudu Bawumia, addressing a forum recently, said the government was on course to securing funds to pay up all genuine victims of DKM, who lost part of their investments after the BoG suspended the company’s operations in 2015.
He accused the previous administration of playing the ostrich, emphasizing, “We inherited a financial system that was weak and fragile with several institutions that had collapsed or were on the verge of collapse.”
Reacting to criticisms leveled against the central bank for revoking the licences of the resolved institutions, the Vice-President noted, “Let us remember that the failures of financial institutions that we have witnessed recently were a direct result of a system of poor licencing, non-existent capital, weak corporate governance characterised by related party transactions, political influence peddling and cronyism, among other things.”
“The NDC government and the previous management of the BoG had ample time to address impending failures. They were aware of the problems in 2015 in the case of banks, and as far back as 2012.”
“In the case of savings and loans and microfinance companies, even in opposition, I alerted the country that on the basis of available data, eight banks were likely to collapse; but they refused to act.”
Dr Bawumia said swift and decisive action taken by the new management of the BoG provided relief for the financial system through the funds provided by the government for depositors’ payouts.
He added that more than a million depositors had had access to their deposits already, while over 7,000 jobs had been saved as a result of employees taken over by the GCB and the Consolidated Bank of Ghana (CBG) or through the Receivers.
“Employees whose salaries and employee benefits had been unpaid by the defunct institutions had been paid or were being paid by the Receivers,” Dr Bawumia said.
FROM Daniel Bampoe, Koforidua