By Vice President Dr. Mahamudu Bawumia asserts that the banking sector clean-up exercise was imperative to salvage Ghana’s banking system from complete collapse.
Speaking during an interaction with the clergy in the Northern Region, Dr. Bawumia revealed that the government faced the tough choice of allocating GH¢25 billion to revoke the licenses of 420 banks and specialized deposit-taking institutions. This action was taken to protect the deposits of over 4.6 million depositors.
He emphasized that this decisive action also safeguarded numerous jobs.
“One of the biggest nightmares I had was that it was clear that if we didn’t move, move to rationalise the banking system and shut down some of these banks, the whole system was going to collapse. So we had to find GH¢25 billion to save the banking system, and we saved the deposits of 4.6 million depositors by just moving their deposits to new banks like the Consolidated Bank. Otherwise, they would have all collapsed, and we would have lost so many jobs.”
He clarified, however, that certain individuals may still face difficulties in recovering their locked-up funds, primarily due to the nature of the businesses or companies where they invested their money.
“For some of the securities like Gold Coast Securities and so on, these were investments that were made by people and not bank deposits and people basically make their own evaluations of the risks involved when investing in certain institutions. Sometimes, when they make a lot of money, you don’t hear complaints but when they lose money then we may hear some complaints.”
