The Vice President Dr. Mahamudu Bawumia has said the National Democratic Congress administration was aware of the challenges in the Banking sector in 2015 and as far back as 2012 in the case of savings and loans and microfinance companies but did nothing.
According to him, many of these financial institutions were dead and in many cases were not even paying their depositors or employees at all or regularly and there were countless instances where some customers would travel several kilometers for just a GH¢200 withdrawal and they were told to go and come another day.
Speaking at a Town Hall Meeting in Kumasi, Dr. Mahamudu Bawumia said ” the current Central Bank leadership inherited was pretty much like a body with cancer in the toe: if you don’t give up that toe in time to end the rot; you will soon move from one with a rotten toe to one without a leg.
Because the rot will eventually spread to your hip and then you are going to have to lose the entire leg. The swift and decisive action was taken by the new management team at the Bank of Ghana provided relief for the financial system as a whole through the funds provided by the Government for depositor payouts.”
The vice president said The Bank of Ghana in cleaning up and strengthening the financial sector, revoked the licenses of 9 banks, 23 savings and loans, and 386 microfinance companies.
Dr. Bawumia said the Bank of Ghana did not do so just because they felt it was time to create suffering for depositors and difficulties for the owners of those institutions, as the NDC is forcing us to believe. Rather, the central bank did this to protect the financial system and save the hard-earned monies of Ghanaian workers.
Dr. Bawumia revealed that all the nine indigenous banks that were closed were to a large extent taken over by indigenous Ghanaian banks – GCB and CBG – ensuring stronger Ghanaian ownership in the banking sector.
Also, the Ghana Amalgamated Trust with 100% Government of Ghana ownership has successfully invested in 4 indigenous banks that we’re unable to meet the new capital requirement.
It is noteworthy that no bank was closed only on account of not meeting the new minimum requirement of GHC 400 million.
He added that Government has already spent over Ghc13 billion paying depositors of banks and other financial institutions, adding, no depositor of a bank, savings and loan or Microfinance Company would lose even a pesewa of their deposits. “ALL depositors of these institutions will receive [a 100%] refund of their deposits since this was no fault of their own. The government has asked the receiver (working with the Bank of Ghana) to expedite the validation and payment of depositors so that all depositors will receive their monies after validation. I will also like to add that this refund will also extend to customers of DKM who have not as yet received the full
refund of their deposits”.
Source: mybrytfmonline/Kofi Atakora
