President Nana Akufo-Addo has announced that customers of indigenous banks that lost their licenses due to the financial sector clean-up exercise will receive full payment of their locked up cash.
He said the same would be done for customers of collapsed microfinance institutions and savings and loans companies.
The president made this known in his Christmas message to Ghanaians on Wednesday.
“Thus far, the Ministry of Finance and the Bank of Ghana have worked together to guarantee payments of 100% of deposits of customers of the failed banks which is being done. I have directed the Ministry of Finance to work with the Bank of Ghana to ensure that same applies to customers of microfinance and Savings and Loans Companies whose licenses have been revoked,” he said.
While stressing that the decision to clean up the financial sector was necessary, he said the jobs of some 6,500 Ghanaians were saved by the exercise.
He also added that some GHS 4.6 million of depositors’ funds was also safeguarded due to the process.
“We have had to take painful but necessary measures to sanitize and save the banking system; a process which I know has brought discomfort to many a household. It is worthy to note however that the jobs of some 6,500 workers were saved as a result, instead of the 10,000 that could have been lost. In addition to the protection of funds of 4.6 million depositors.
The President further noted that government will soon make public, investigations into the circumstances that led to the collapse of some indigenous banks in the country.
According to him, preliminary investigations reveal that huge assets of the collapsed banks were diverted.
He said persons found culpable for the collapse of the financial institutions would be duly dealt with.
“Investigations into potential criminal conduct are proceeding. As it appears, there has been a massive diversion of assets of these financial institutions. I assure you that the outcome of these inquiries will be made known very soon as well as actions taken to bring those responsible to book,” the President promised.
The financial sector clean-up, commenced by the Akufo-Addo administration in August 2017, has led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, two non-bank financial institutions and 53 Fund Management firms.
Banking sector reforms
In August 2017, the Bank of Ghana (BoG) gave GCB Bank Ltd the green light to acquire two local banks UT and Capital bank due to severe impairment of their capital.
In August 2018, the Bank of Ghana consolidated five other local banks into what it calls the Consolidated Bank Ghana Limited.
The Bank of Ghana in a statement on January 4, 2019, following the expiration of the minimum capital requirement deadline, said all the 23 remaining banks have met the new minimum paid-up capital of GHC400 million.