The flagbearer of the National Democratic Congress (NDC), John Mahama, has once again bemoaned the negative impact of the financial sector clean-up on the staff of some collapsed institutions.
According to the leader of the NDC, many have been left jobless and dejected due to the action by the current government.
Speaking at a rally at Navrongo in the Upper East Region, John Mahama reiterated his promise to restore confidence in the financial sector if the NDC is re-elected in the upcoming polls.
“They [the NPP] have destroyed more than 10,000 jobs in the banking sector alone. All the GN Banks used to have staff in them all over the country. Today, where are those staff? They are all sitting at home. All those banks that were collapsed had staff who were working and earning a living. Now, all of them are sitting at home. Some of them have died, some have been ejected from their homes, some have had their spouses leaving them, and that is a damage that is irreparable,” he claimed.
“When NDC comes back, we are going to restore the Ghanaian indigenous investments in the financial sector so that all those who have lost their jobs can work again. All those who have lost money in the collapsed financial institutions, we will pay you back in full,” he pledged.
This is not the first time the NDC flagbearer has promised to pay back people’s locked up funds if given the nod to lead the country.
As part of its efforts to restore confidence in the banking and specialized deposit-taking sectors, the Bank of Ghana (BoG) embarked on a clean-up exercise in August 2017 to deal with insolvent financial institutions whose continued existence posed risks to the interest of depositors.
The clean-up saw the revocation of licenses of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions.
The move by the central bank was a comprehensive assessment of the savings and loans and finance house sub-sectors carried out by the Bank of Ghana in the last few years after it identified serious breaches.
The Securities and Exchange Commission (SEC) in November 2019 also revoked the licenses of 53 Fund Management Companies following the companies’ failure to “return client funds which remain locked up and in a number of cases, have even folded up their operations.”
The action was taken pursuant to Section 122 (2) (b) of the Securities Industry Act, 2019 (Act 929) which authorizes SEC to revoke the license of a market operator under some circumstances.
Payment so far
During the initial stages of the banking sector clean-up, government released GHS6.07 billion to settle customers of the defunct financial institutions.
It subsequently released GHS3.5 billion to settle all outstanding claims.
Regarding the fund management companies, government announced bailout packages for their customers.
In October 2020, the official liquidator of the 53 defunct fund management companies, Jemima Oware, started payment of bailout funds for the first batch of investors of the companies whose licenses were revoked by the Securities and Exchanges Commission.
This group was made of 170 investors out of the 2,850 investors who had submitted their redemption requests.
Mrs. Oware further stated that the remaining investors were yet to get their monies but have gone through the validation process and received a claim ID.
Although the government recently authorised a partial payment of up to GHS50,000 to all customers of the remaining defunct Fund Management Companies whose monies were locked up, the main opposition party, NDC, still insists it will pay all outstanding debts in full when it comes into power.