The Governor of the Bank of Ghana, Dr Ernest Addison, has revealed that about 95 per cent of customers of the collapsed nine local banks during the clean up exercise in the banking sector, have been fully paid their locked-up funds.
He said this when President Nana Addo Danmkwa Akufo-Addo paid a working visit to the central bank on Tuesday August 25.
He said “We had the [banking sector] reform in two phases. The first phase had to do with the banking system where we revoked the licenses of the banks. Depositors got their monies.”
“The second phase of payment has to do with the SDIs – Savings and Loans and Microfinance Institutions and in their case, more than 95 percent of depositors have been paid so there is just about 5 percent of depositors who have not been paid.”
He added “Your Excellency, the Bank of Ghana, over the last three and half years, has played a critical role in the government’s transformation agenda. Through reforms that were effectively coordinated with the fiscal authorities, macroeconomic stability was re-established following the significant imbalances at the end of 2016. Prior to the onset of the COVID-19 pandemic, the Ghanaian economic was once again classified among the fastest growing economies in the world, under your leadership. Growth averaged  percent; inflation was reduced significantly and maintained in single digits and well within the Banks target range, and exchange rate stability was well anchored. In fact, the economy had all the ingredients for broad-based inclusive growth.
“And these efforts were rewarded with Ghana’s first ratings upgrade, in 10 years, by Fitch global ratings agency from B- to a B with a positive outlook. Your Excellency, your support to the Bank during the reforms in the banking sector cannot be over emphasized.
“Your clear leadership and understanding of the role of the financial sector in the government’s transformation agenda, gave the leadership of the Bank the confidence and courage to embark on the comprehensive banking sector reforms over the last three years, which saw an increase in the minimum capital requirements, clean-up of the financial sector by the revocation of licenses of weak and insolvent institutions, and a revamp of the regulatory framework to stabilise and strengthen the sector.
“The clean-up has resulted in a stable financial sector with fewer banks and Specialized Deposit-Taking Institutions (SDIs) that are well capitalised, liquid, and solvent, and better able to support our nation’s economic growth agenda. These efforts helped to earn the Bank international acclaim as the Central Bank of the Year in 2019. By the end of 2019, all the financial sector soundness indicators showed strong improvements as capital adequacy ratio, profitability, and liquidity levels increased significantly while non-performing loans declined.
“Your Excellency, Government’s decision to provide funding to pay off depositors and former employees of the defunct financial institutions, came at great cost to the national budget, but has provided significant financial relief to several thousands of individuals, households, and small businesses, and has helped to keep the financial system stable. The successful launch of the Ghana Deposit Protection Scheme in November 2019 under the auspices of the Bank of Ghana to help the protect the savings of small depositors, further promotes confidence in the banking system.”
By Laud Nartey|3newes.com|Ghana