In a significant development aimed at addressing the fallout from the banking sector clean-up in Ghana, the government has earmarked GHS4 billion to compensate depositors who lost their funds during the restructuring process. This announcement was made by Hon. Abena Asare, Member of Parliament for Atiwa East and Deputy Minister of Finance, during a press briefing held at the Parliament House in Accra.
The banking sector clean-up, initiated by the Bank of Ghana (BoG) in 2017, was a comprehensive effort to address systemic weaknesses and restore confidence in the financial system. The exercise involved the revocation of licenses of insolvent banks, mergers of some banks, and the creation of the Consolidated Bank Ghana (CBG) to absorb selected assets and liabilities of the affected banks.
While the clean-up was necessary to safeguard the stability of the financial sector and protect depositor funds, it also led to significant disruptions and losses for depositors, particularly those with funds locked up in collapsed banks. Recognizing the plight of affected depositors, the government has taken steps to provide relief and ensure that depositors receive their funds in a timely manner.
During the press briefing, Hon. Abena Asare provided insights into the government’s plan to compensate depositors and restore confidence in the banking sector. She revealed that the GHS4 billion allocation is part of the government’s broader commitment to financial sector reforms and inclusive growth. The funds will be disbursed through the Receiver appointed by the BoG to manage the assets and liabilities of the collapsed banks.
Furthermore, Hon. Asare emphasized the government’s determination to ensure transparency, accountability, and fairness in the compensation process. She assured depositors that the government is committed to resolving outstanding issues related to the banking sector clean-up in a manner that prioritizes their interests and rights. To this end, she announced the establishment of a dedicated helpline and information center to assist depositors with inquiries and claims related to the compensation scheme.
In addition to the compensation package, Hon. Abena Asare highlighted the government’s efforts to strengthen regulatory oversight, enhance corporate governance standards, and promote financial inclusion in the banking sector. She emphasized the importance of maintaining a sound and resilient financial system that can support economic growth and development in Ghana.
The announcement of the GHS4 billion compensation package was met with mixed reactions from various stakeholders. While some welcomed the government’s intervention as a positive step towards addressing the grievances of affected depositors, others expressed concerns about the adequacy of the allocated funds and the pace of the compensation process.
Civil society organizations and consumer advocacy groups called for greater transparency and accountability in the management of the compensation scheme. They urged the government to ensure that all eligible depositors receive their funds without delay and that the process is free from political interference or favoritism.
Economists and financial analysts cautioned that the banking sector clean-up has exposed underlying vulnerabilities and structural challenges within the financial system that need to be addressed comprehensively. They stressed the importance of implementing reforms to strengthen risk management, improve corporate governance, and enhance regulatory supervision to prevent a recurrence of similar crises in the future.
In conclusion, the government’s decision to allocate GHS4 billion to compensate depositors affected by the banking sector clean-up reflects its commitment to restoring trust and stability in the financial sector. However, the success of the compensation scheme will ultimately depend on the effectiveness of its implementation and the government’s ability to address the root causes of the crisis. As stakeholders continue to monitor developments in the banking sector, the focus remains on promoting transparency, accountability, and resilience to ensure the long-term sustainability of Ghana’s financial system.
story filed by: Nana kwaku Duah
