“Lives are at stake and the impacts are as gravely economic as they can be political. These are uncomfortable times and a contagion of morbid despondency is upon us as customers and employees of these institutions will fret and frustrate…I hope we are prepared”, the words of President of IMANI Africa, Franklin Cudjoe following the Bank of Ghana’s revocation of licenses in recent times.

The bank of Ghana Friday revoked the licenses of some 23 Savings and Loans Company Friday with reasons that they have become insolvent even after a reasonable period within which the Bank of Ghana had engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”

Reacting to the move on his Facebook wall, Franklin Cudjoe noted that the action can have dire consequences on the economy and citizens in general, those he hopes the country’s financial managers are ready to handle and or manage responsibly.

He however acknowledged efforts by the Central Bank to clean the system and rid it of non-compliant institutions.

“I am a stickler for regulatory compliance and I can see the point Bank of Ghana wants to make. But are these the only financial institutions with tainted procedures?

Good luck to the financial managers of Ghana and I hope again, that tax payer funds will not be the sacrificial lamb. The commons must not be tragic all the time”, he wrote.

The central bank in a statement on Friday, as part of the announcement explained that the actions “were taken pursuant to 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. The Bank of Ghana has also appointed Mr Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.”

Assurance to customers

BoG has also assured that funds are available to pay customers of the 23 finance houses and savings and loans companies whose licences were revoked today.

The Central Bank says it has provided funds to ensure that the Receiver of the financial entities, whose licences have been revoked, will pay the affected customers.

“The Government has made available funds to enable the Receiver to pay depositors of the savings and loans companies and finance houses after validation of their claims. Other creditors of the failed institutions will be settled by the Receiver in line with the hierarchy or priority of creditors’ claims set out under Act 930,” the Bank of Ghana said in a statement.