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Deposit Protection Scheme will restore confidence in financial sector—Dr. Bawumia

Vice-President Dr. Mahamudu Bawumia

The Vice President, Dr. Mahamudu Bawumia, is optimistic the setting up of the Ghana Deposit Protection Scheme will enhance confidence in the financial sector.

He explained that the passage of the Deposit Protection scheme, which will be implemented by the Ghana Deposit Protection Corporation, will also reform the financial sector since there are strict guidelines that must be followed.

Read: Banking sector clean-up: Government fully supports BoG, SEC – Bawumia

Speaking at the inauguration of the Ghana Deposit Protection Corporation, Dr. Bawumia insisted that confidence is gradually improving due to the assurances granted by the scheme.

“There is ample evidence from across the globe that the presence of strong safety net is a key to restoring and maintaining public confidence in the financial system,” he said.

He stated that with the level of vulnerability reduced in the financial sector, depositors will be encouraged to save their funds, enhancing financial inclusion.

Meanwhile, the Governor of the Bank of Ghana, Dr. Ernest Addison, said the decision to join the International Association of Deposit Insurers after the scheme was passed into law, portrays Ghana as a financially stable country to the world.

About the Deposit Protection Scheme

The Ghana Deposit Protection Scheme was established in September 2019 to protect small depositors from losses as a result of the collapse of some financial institutions.

Customers of collapsed banks for example are entitled to 6,250 cedis insurance package across board following the passage of the law.

Read: Akufo-Addo’s massive development only a tip of the iceberg – Bawumia hints

In addition, the scheme is to support the development of a safe, sound, efficient and stable market based financial system in Ghana, by ensuring prompt payouts to insured depositors.

The Ghana Deposit Protection Scheme is a publicly owned scheme, managed by the Ghana Deposit Protection Corporation, a statutory corporation.

The mandate of the scheme is a paybox, meaning that the scheme is only to reimburse insured depositors where the Bank of Ghana revokes the licenses of a bank or specialized deposit taking institution.