It is expected that depositors’ funds at the various banks will be insured in the coming days.
This is because the Ministry of Finance is preparing to lay before Parliament the Depositors’ Insurance Bill for consideration.
Governor of the Bank of Ghana Dr. Ernest Addison is optimistic this will increase confidence in the banking sector.
The Ghana Depositors’ Protection Act 2016 (Act 931) is expected to protect depositors from unforeseen circumstances that may result in loss of funds.
The law follows a recent debacle that hit the microfinance sector resulting in customers of DKM Microfinance and God is Love Fun Club, among others, losing millions of Cedis, and the recent UT and Capital bank takeover.
According to the law, depositors whose monies get locked up in financial institutions during crisis may receive between GH¢1,250 and GH¢6,250 in compensation.
Dr. Addison is optimistic this will increase confidence in the banking sector.
“We need the depositors’ insurance to provide the added safety net to boost confidence in the sector and also essentially ensure the protection of deposits, especially small deposits,” he stressed.
A financial lawyer, Seth Asante, advocated measures that will ensure the independence of the insurance corporation from the Bank of Ghana and other governmental agencies.
“The depositors’ corporation should be able to make its one decision away from the Bank of Ghana. That way it can decide who will be covered and who will not be covered. That should be the next measure the Central Bank will be thinking of,” he argued.
President of the Ghana Association of Bankers Alhassan Andani allayed fears the funds for the insurance will be deducted from deposits.
“Let’s get it clear that, the insurance will not be deducted from the deposit. The banks will pay them.”