President Akufo-Addo has given executive approval for an expenditure totalling GHC15.6 billion for the Ministry of Finance to protect depositors and investors of failed financial institutions.
The amount is also to improve the liquidity of the financial sector.
A letter dated 29th November this year, signed by the Secretary to the President, Nana Asante Bediatuo and addressed to Finance Minister, Ken Ofori Atta, in response to a request he placed with the President, made this known.
Ghana’s financial sector has since a couple of years ago undergone sanitizing spearheaded by the Bank of Ghana, in collaboration with the Securities and Exchange Commission (SEC).
The Finance Ministry is of the firm conviction that the amount will offer critical support to the banking sector and inject life once again into its activities.
The financial sector clean-up has witnessed the collapse of about 420 financial institutions most of whose financial muscles were weak and could not live up to the new standard set by the regulator.
The insolvency situation of such banks warranted government’s intervention through the central bank to revoke their licences and then reorganise some of them. This involved the Ghana Commercial Bank (GCB) takeover of the UT Bank and Capital Bank.
Also, Construction Bank, Beige Bank, Royal Bank, uniBank and Sovereign Bank had all their assets and liabilities transferred to form the Consolidated Bank of Ghana with the Government of Ghana owning 100% shares.
So far, the licenses of 420 financial institutions including 347 micro-finances have been revoked.