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Nana Akomea: Paying depositors of defunct financial institutions is prudent decision

The New Patriotic Party (NPP) says payment of all depositors of banks, microfinance institutions, and savings and loans institutions, who suffered from the financial sector clean-up was borne out of the government’s conviction to attend to the plight of Ghanaians.

The governing party further said its intervention in resolving the financial sector crisis and subsequent payment of depositors, demonstrated its prudent leadership.

Speaking for the party at a press briefing in Accra yesterday, Nana Akomea, Chief Executive Officer (CEO) of the State Transport Corporation (STC), explained that, government took that decision, considering the adverse effect of the financial sector clean-up on affected depositors, which had been compounded by the coronavirus disease (COVID-19) pandemic.

“Cognisant of the hardships and liquidity crunch occasioned by the COVID-19 pandemic, this could be described as a prudent approach to ease the already constrained economy, boost economic activity and expedite the return of the economy to normalcy,” he said.

Nana Akomea added: “President Akufo-Addo having being deeply touched by the fervent cries of these depositors, held consultations with the Bank of Ghana to explore other ways of relieving these depositors.”

He said the payment of GH¢3.56 billion to more than four million affected depositors of the defunct financial institutions, remained a monumental feat of the NPP, and said, government was committed to making the country’s financial sector strong and an internationally competitive one.

“The financial commitment made by government thus far, is indicative of its resolve to create a highly robust and an internationally competitive financial sector capable of supporting the growth and development of firms, businesses and the various sectors of the economy,” he said.

Nana Akomea said the collapse of the financial institutions was as a result of lack of effective supervision, and loss of control over the fight to restore sanity in the banking sector by the erstwhile John Dramani Mahama administration.

The member of the NPP Campaign Communication team indicated that, “monies allocated to safeguard depositors’ funds were misappropriated by heads of banking institutions with government making no effort to demand accountability.”

It would be recalled that, the Bank of Ghana (BoG) in mid-August 2017 and the end of December, 2018, through a GH¢11.7 billion regulatory crackdown cleaned up the financial sector, leading to collapse of some financial institutions.

The regulatory intervention also resulted in some mergers and acquisitions, leading to a significant alteration, particularly, in the banking sector, and by 2019 the licences of nine banks had been revoked by the BoG on the grounds of insolvency.

The BoG had also approved three mergers: First Atlantic Merchant Bank with Energy Commercial Bank; Omni Bank with Sahel Sahara Bank; and First National Bank with GHL Bank.

Although some 16 banks were able to meet the new capital requirement of GH¢ 400 million, mainly by securing capital injections or through the capitalisation of surplus income, five banks secured cash injections from the Ghana Amalgamated Trust (GAT), a group of private pension funds.

BY FRANCIS NTOW

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