Former President John Dramani Mahama has promised to pay customers of defunct financial institutions their monies which have been locked up in these institutions if he wins the upcoming general elections.
According to him, the next National Democratic Congress (NDC) administration shall not entertain any long-term payment plans that will exacerbate the living conditions of the victims of the collapsed finance houses.
“I pledge on behalf of the NDC that we shall pay within one year all who have funds locked up with the collapsed financial institutions. Within one year. I promise!”
The Presidential candidate of the NDC indicated that, as has been established in other countries, the next NDC administration will introduce a Financial Services Authority that will ensure, per its responsibilities that, financial markets consider the needs of consumers and the economy at large.
“The Authority will oversee all financial products and services that are offered to consumers, and will effectively and efficiently prevent and stop the challenges that have confronted customers of Menzgold, DKM among others.
“We will restore Ghanaian indigenous investment in the banking and financial sector through a tiered banking structure in order to restore viable credit sources for Ghanaian SMEs. We will make amends for those whose businesses were collapsed due to political victimization.”
Speaking at an event in the UPSA auditorium to outdoor his running mate, Jane Naana Opoku-Agyemang to the country, he said,
“My heart goes out to the many who have been affected by this Government’s unjustifiable collapse of Ghanaian-owned financial institutions.”
Mr Mahama also said, it is very painful to hear the justifications of government officials in their attempts to lessen the repercussions of the decision to sink billions of cedis to manage the impact of the collapse. The Finance Minister, Ken Ofori-Atta in the Mid-year budget review put the amount government has spent on the collapsed banks at ¢21 billion.
“I weep for the many who have lost their jobs, the many who have lost their businesses, the many who have lost their livelihood among others.”
Mr Mahama
On August 14, 2017, the Bank of Ghana (BoG) in a press release announced its approval for the takeover of two local banks, UT Bank LTD and Capital Bank LTD, by GCB Bank LTD. The major reason the Central Bank cited for the takeover was the insolvency of the aforementioned banks.
According to BoG, upon several agreements with the banks to increase their capital requirements, managers of the banks failed. As a result of this failure, the licenses of the banks were revoked to protect customers, according to BoG
Almost a year later, on August 01, 2018, BoG again in a press release announced the consolidation of five indigenous banks to form a new bank called the Consolidated Bank Ghana LTD. The five collapsed banks included Unibank Ghana Ltd, The Royal Bank LTD, Beige Bank LTD, Sovereign Bank LTD, and Construction Bank LTD The same reason of insolvency was cited as a cause of the collapse of the various banks. Within a span of two years, about seven indigenous banks had gone under.
Last year, 2019, a plethora of financial institutions also lost their operating license.
The Bank of Ghana revoked the licenses of 23 savings and loans and 39 microcredit companies lost their licenses.
