The Ghana Deposit Protection Corporation is to secure the funds of depositors in the event of a collapsed financial institution, Vice President Dr Mahamudu Bawumia has said.
The corporation was established following the passage of the Ghana Deposit Protection Act, 2016 (Act 931) to, among others, implement a deposit protection scheme in the country.
Speaking at the 2019 International Association of Deposit Insurers (IADI) Africa Regional Committee Technical Assistance Workshop in Accra yesterday, the Vice President said the Deposit Protection Corporation would operate as a safety net to restore and maintain public confidence in the financial system.
“The establishment of the Ghana Deposit Protection Corporation has been an important step to boosting the confidence of the Ghanaian depositor and it is part of the efforts to locking in the gains of financial sector reforms carried out over the last two years,” he said.
The Vice President said there were ample evidence globally that deposit insurance systems played essential roles in protecting banks’ customers and reducing vulnerabilities of the financial sector.
“Deposit insurance can enhance stability of the financial system by preventing bank runs, and support the stability and smooth operation of the economy,” he said.
Vice President Bawumia assured the coporation of the government’s support in ensuring that it grows to become an important safety net in the Ghanaian financial sector.
“I am positive that its membership of IADI will also help to steer the corporation in the right direction of international best practice,” he said.
The Vice President urged the corporation to ensure the necessary public education about the scheme, its operations and benefits to every depositor.
Such an education, he added, would be an invaluable public good and urged the corporation to get on with it as soon as possible.
“The general public must gain the confidence that even in the event of a failure of a financial institution the funds of depositors are secure”.
“This new deposit insurance scheme, in addition to the sound prudential regulation by the Bank of Ghana, should ensure that the Ghanaian financial sector is set on a good path to financial stability,” he said.
Vice President Bawumia urged the newly-inaugurated board and management of the corporation to be innovative and operate the scheme to protect the funds of depositors.
Present at the conference were Mr David Walker, Secretary General, International Association of Deposit Insurers (IADI), Alhaji Umaru Ibrahim, Chairman, IADI African Regional Committee (ARC), and Dr Ernest Addison, Governor Bank of Ghana and Chairman of Ghana Deposit Protection Corporation (GDPC).
Others were Dr Maxwell Opoku Afari, First Deputy Governor, Bank of Ghana, Mrs Elsie Addo Awadzi, Second Deputy Governor, Bank of Ghana and alternate Board Chair GDPC, and members of the GDPC Board.
BY YAW KYEI