Vice President Dr Mahamudu Bawumia Tuesday assured depositors of the defunct savings and loans and microfinance institutions, whose funds had been locked up, of full payment of their deposits.

Addressing participants at a Town Hall Meeting and Results Fair in Kumasi, Dr Bawumia said government empathised with them for having to endure anguish and hardships through no fault of theirs.

In 2019, the Bank of Ghana (BoG) embarked on a clean-up of the financial sector and revoked licences of some banks, microfinance and savings and loans companies.

The exercise resulted in the loss of jobs and in some cases locking up of depositors’ funds.

To assuage their pain, Vice President Bawumia said government would restore 100 per cent of their locked up funds once they had been verified.

In a further move to address residual pain from previous collapses, government would secure the funds and pay up the victims of DKM, who lost part of their investments after the BoG suspended its operations in 2015, Dr Bawumia said.

He accused the previous government of playing the ostrich, burying its head in the sand and papering over the cracks.

“We inherited a financial system that was weak and fragile with several institutions that had collapsed or were on the verge of collapse,” Dr Bawumia said.

"The Bank of Ghana, in cleaning up and strengthening the financial sector, revoked the licenses of many banks, savings and loans and microfinance companies. Some have criticised the action of the Central Bank for a variety of reasons.”

“First of all, let us remember that the failures of financial institutions that we have witnessed recently were a direct result of a system of poor licensing, non-existent capital, weak corporate governance characterised by related party transactions, political influence peddling, and cronyism, among other things.”

“The NDC Government and the previous management of the Bank of Ghana had ample time to address impending failures. They were aware of the problems in 2015 in the case of banks and as far back as 2012.”

"In the case of savings and loans and micro finance companies, even in opposition, I alerted the country that on the basis of available data, eight banks were likely to collapse but they refused to act.”

Dr Bawumia said swift and decisive action taken by the new Management of the Bank of Ghana provided relief for the financial system through the funds provided by Government for depositors' pay outs.

He said more than a million depositors have had access to their deposits already and over 7,000 jobs had been saved as a result of employees taken on by the GCB Bank and the Consolidated Bank of Ghana (CBG) or the Receivers.

“Employees whose salaries and employee benefits had been unpaid by the defunct institutions have been paid or are being paid by the receivers,” Dr Bawumia said.

He said government had already spent over GH¢ 13 billion paying depositors of banks and other financial institutions adding that no depositor would lose even a pesewa of their deposits, as the President had assured.

“All depositors of these institutions will receive a 100% refund of their deposits since this was no fault of theirs," he said.

Government had asked the Receiver who is working with the Bank of Ghana to expedite the validation and payment of depositors so that all would receive their monies.