Business News of 2014-03-06

BoG to roll out insurance scheme for banks

The Bank of Ghana is working to establish a deposit insurance scheme for commercial banks.

The scheme is expected to protect funds of depositors so that in the situations where a commercial bank collapses the central bank can fall on the insurance to pay the bank's clients.

The insurance should be in place after Parliament approves an act to give the Bank of Ghana the mandate to supervise the operations of the scheme. Head of Banking Supervision at the Bank of Ghana, Franklyn Belyne, says the scheme would enhance confidence in the banking system.

He said the scheme will serve as a remedy for the inconveniences that depositors encounter when a bank fails, adding it will also take away reliance on central government.

"This will provide some assurance to the general public that they can deal with the banks without worrying too much" said Mr Belyne.

Initial capital for the scheme will be in form of a grant from the German government, while the Bank of Ghana and Ghana government provides the remainder of the funds to keep it running.

The Bank of Ghana will then begin the process of selling premiums of the deposit insurance scheme to all commercial banks in the country. "The premium is going to be charged on the bank based on their deposits", he said.

Source: myjoyonline.com
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