The 2022 Financial Stability Review of the Bank of Ghana has revealed that the amount involved in the full bailout scheme of Liquidated Fund Management Companies increased to GH₵3.65 billion, from the previous GH₵1.38 billion budgeted.
Out of the increment, payout to investors also increased to GH₵1.56 billion in 2021 from GH₵622.66 million in 2020. In total, the number of claims paid was 8,955 out of the 11,915 sign ups, representing 75.16% of total claims. The payments made were in respect of Tier 1.
The Tier 2 component of the sign-up, which amounted to GH₵1.725 billion (out of the total sign-up value of GH₵3,658), was invested in the Amalgamated Mutual Fund Limited to be redeemed over a five-year period, starting from the first anniversary.
Tier 2 redemptions paid on the first anniversary, effective October 2021, was ₵64.73 million, representing 20.0% of amount in the Fund. Meanwhile, the number of claims sign-up for partial bailout was however 76,667 at the end of 2021. This is compared to 62,235 in the previous year. The value of claims was ₵1.379 billion, out of which ₵1.341 billion was paid in 2021.
In comparison, the value of claims was GH₵1,169 million in 2020, of which ₵744 million was paid. The number of clients whose claims were ₵50,000 or less, were 60,840, representing 79.0% of the total claims.
The Partial Bailout
The partial bailout was initiated in November 2020, and commenced in December 2020, to pay a flat amount of ₵50,000 as government relief to investors who had not been able to sign up for the bailout scheme.
Some investors were also not able to sign up due to delays the Official Liquidator encountered in obtaining liquidation orders for their Fund Managers.
As of the 31st March 2021, out of a total of One Hundred Thousand, Eight Hundred and Ninety-Eight (100,898) claims received against forty-seven (47) companies valued at Eleven billion, Seven Hundred and One million Ghana Cedis (GH¢ 11.70 billion), a total of One Hundred Thousand, Seven Hundred (100,700) claims valued at Eight billion, Three Hundred and Fourteen million Ghana Cedis (GHS 8.314 billion) have so far been validated. This means that an estimated 99.8% of the total claims filed have been validated with an almost 30% found to be unwarranted.
It can be recalled that a total of 16 universal banks which once operated in the country were collapsed within two years as part of measures taken by the Bank of Ghana to cleanse the banking sector to make it more robust.
The Bank of Ghana (BoG) In 2017 embarked on a comprehensive reform agenda to strengthen the regulatory and supervisory framework for a more resilient banking sector.
While some banks had their licenses revoked, others were merged for their inability to raise the new 400 million-cedi minimum capital requirement as of December 31, 2018. For other banks, the central bank revealed acquired their licenses fraudulently and through the use of non-existent capital.
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