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Govt disburses GHS3.56 billion to settle customers of the 347 collapsed banks

Govt releases GHS3.56 billion to settle customers of the 347 collapsed banks

Govt releases GHS3.56 billion to settle customers of the 347 collapsed banks

Customers of the 347 collapsed Microfinance companies, Savings and Loans and Finance Houses on Wednesday received their monies in full.

This follows the release of GHS3.56 billion by government to settle the remaining depositor claims thereby replacing the us of bond for payment as announced earlier.

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A statement issued by the Receiver in Accra on September 15, said, customers who have either received or are due commercial paper in partial satisfaction of their claims would receive cash payments at no discount for the bond they have already received.

It said depositors who have already discounted all or part of their bond would now receive a full refund of the discount they have suffered in cash.

The statement directed affected customers to visit any branch of the Consolidated Bank Ghana Limited to receive their monies through the new funding arrangement.

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The Receiver, in April 2020, issued a government-backed non- interest-bearing financial instrument to the defunct institutions whose validated and agreed claims in the resolution exercises had not been fully extinguished by the application of the cash component of government’s funding provided for that purpose.

The tenor for the bond was for a period of five years with a 10 equal installments every six months as the drawdowns.

The timing of first drawdown payment was scheduled for March 31, 2021.
Of the GHS 6.49 billion required to fully settle all valid depositor claims, about GHS3.56 billion, representing 55 per cent of these claims, were initially settled with government-backed bonds.

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GHS 2.93 billion (45 percent) had already been released to some depositors of these resolved companies in cash and bonds.

There were however concerns that this method, the non-interest-bearing nature of the bond and tenor “did not make the Bond commercially attractive, thus creating a significant loss in value of their claims to them.”

In May 2019, the Bank of Ghana (BOG) revoked the licenses of 347 microfinance companies as part of the financial sector cleanup.

The BOG also revoked the licences of 23 Insolvent Savings and Loans companies and Finance Houses in August that same year.

These actions were in line with Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.

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Written by Joyceline Natally Cudjoe

I am An Entertainment Columnist, Content Writer, Blogger, Novelist, Poet, and a Publicist.

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