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Business News of Wednesday, 12 February 2020

Source: laudbusiness.com

BoG protected you – Bawumia to depositors of collapsed banks

Vice President Dr Mahamudu Bawumia, has said the Bank of Ghana protected the earnings of the hardworking Ghanaians during the cleanup exercise undertaken in the financial exercise which led to the collapse of some nine domestic banks.

Speaking during Town Hall meeting in Kumasi on Tuesday, February 11, Dr Bawumia said the decision to clean up the banking sector was not to inflict pains on Ghanaians, rather to protect the deposits of Ghanaians.

He said: “We inherited a financial system that was weak and fragile with several institutions that had collapsed or were on the verge of collapse. The Bank of Ghana in cleaning up and strengthening the financial sector revoked the licenses of 9 banks, 23 savings and loans, and 386 microfinance companies.

“The Bank of Ghana did not do so just because they felt it was time to create suffering for depositors and difficulties for the owners of those institutions, as the NDC is forcing us to believe. Rather, the central bank did this to protect the financial system and save the hard-earned monies of hardworking men and women like those bustling at Suame Magazine, Kumasi Dwamu, and Adum right now as I speak.”

Furthermore, “we should all note that many of these financial institutions were dead and in many cases were not even paying their depositors or employees at all or regularly.

“There were countless instances where some customers would travel several kilometres for just a GH¢200 withdrawal and they were told to go and come another day. This had become an unending spin for these good and innocent people - “korbra-korbra saa”.

“Indeed, what the current Central Bank leadership inherited was pretty much like a body with a cancer in the toe: if you don’t give up that toe in time to end the rot; you will soon move from one with a rotten toe to one without a leg.

“Because the rot will eventually spread to your hip and then you are going to have to lose the entire leg. The swift and decisive action taken by the new management team at the Bank of Ghana provided relief for the financial system as a whole through the funds provided by Government for depositor payouts.”

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