Help customers of collapsed financial institutions recover their money – Catholic Bishops to gov’t

The Ghana Catholic Bishops’ Conference has appealed to the government to help customers of the defunct banks and savings and loans companies to recover their locked up monies.

The Central Bank has over the past two years revoked the licenses of a number of banks, microfinance companies, and savings and loans companies.

Although the Catholic Bishops justified the move by the Central Bank to revoke the licenses of these financial institutions to save them from greater debt, they have expressed concern for the many Ghanaians whose monies are locked up and are pleading on the government to come to their aid.

They made this known in a communiqué containing resolutions taken after the group’s annual plenary assembly

“To the extent that the exercise [financial sector clean up] is meant to protect depositors from losing their hard-earned monies, we commend the Central Bank. We are, however, concerned about many Ghanaians whose monies have been locked up in these defunct institutions with no hope of redeeming their investments and appeal to the government to help these people recover their monies,” they said.

The Bishops have also urged the government to “consciously protect indigenous financial institutions that are only starting, from being swallowed up by the big international and other powerful financial institutions”.

Background

The financial sector clean-up, commenced by the Akufo-Addo administration in August 2017, has led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions over issues of maintaining the minimum capital requirement.

The most recent has to do with the Securities and Exchange Commission (SEC) revoking the licenses of some 53 Fund Management Companies.

The fund management companies who have lost their licenses were said to be managing a customer base of about 56,000 whose funds run in excess of GH¢8 billion out of the total GHc25 billion of the entire securities sector.

SEC also explained that the revocation is “in accordance with its mandate of protecting investors and the integrity of the capital market.”

Financial sector cleanup yielding positive results

A Deputy Governor of the Bank of Ghana, Elsie Awadzi had earlier said that the Central Bank’s banking sector clean-up had started to yield positive results.

According to her, the move which led to the collapse of some banks has helped to protect depositors’ funds and instilled confidence in the Ghanaian banking sector.

Culprits in banking sector crisis to face justice soon

Meanwhile, the Finance Minister, Ken Ofori Atta while presenting the 2020 budget said the government will soon prosecute individuals whose actions led to the banking crisis.

Rubbishing claims that the government intentionally closed down these institutions, he explained that the “on-going prosecutions” will specifically ensure that “all those culpable, as well as the negligent officials of the regulators, will face justice as soon as possible.”