Depositors of funds in Ghana ’s failed financial institutions now have some hope. Ghana’s President Nana Akufo-Addo has granted executive approval for the expenditure of GHC15.6 billion to save the funds of depositors of the various financial institutions that have collapsed as well as shore up the liquidity of the financial sector.
A letter addressed to the Minister of Finance, Mr Ken Ofori-Atta, by the President’s Executive Secretary Nana Asante Bediatuo, said:
“The President has granted executive approval for an expenditure of up to fifteen billion six hundred million Ghana cedis (GHC15,600,00,00.00) toward protecting depositors and investors of failed financial institutions and to improve liquidity of the financial sector”.
Here Is All You Need To Know
- In the past two years, the Bank of Ghana’s reforms has led to the collapsed of nine local banks, 347 microfinance institutions and some 23 finance houses.
- The collapse of the nine local banks birthed the state-owned Consolidated Bank Ghana (CBG) Limited.
- Heritage Bank Limited (HBL) was one of the last two collapsed banks to have been added to Consolidated Bank Ghana Limited (CBG), which was first formed when the central bank collapsed some five local banks in August 2018.
- On 1 August 2018, the Bank of Ghana announced the consolidation of the failed local banks.
- They included the Royal Bank, The Beige Bank, The Construction Bank, Sovereign Bank and uniBank.
- Later on, HBL and Premium Bank were added to the first five.
- The BoG on 14 August 2017, approved the takeover of UT Bank and Capital Bank, by the state-owned GCB Bank Limited.
- Also, the Securities and Exchange Commission recently revoked the licences of 53 fund management companies.
- Recall that Ghana’s Security and Exchanges Commission (SEC) recently selected the Consolidated Bank of Ghana Limited (CBG) as a validation point for customers of 53 defunct Fund Management Companies.
According to SEC, a liquidator will work with the Ghanaian government to pay a capped amount to all affected investors to provide some relief. The court will decide issues of assets retrieval and liquidation. Under Section 122 of Ghana’s Securities Industry Act, the license of any person dealing in securities may be revoked if it wounds up. Once the license is revoked by SEC, the revocation takes effect from the date the revocation order was made by SEC. However, no such revocation shall operate to avoid or affect an agreement, transaction or arrangement relating to the trading in securities ( funds, also included) entered into by that person, whether the agreement or transaction or arrangement was entered into before or after the revocation of the license, neither does the revocation affect a right, obligation or liability under an agreement, transaction or arrangement.
Click here to see a mapped branch network of CBG branches to the offices of the affected Fund Management companies.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world