Ghana set to launch Deposit Insurance to protect customers savings from losses

GHANA – Ghana’s is set to launch the Deposit Insurance Protection Corporation to protect people with small savings from losses.

The losses to be insured are those incurred as a result of the occurrences of an insured event such as the revocation of a Deposit Taking Institution’s license.

Dr Ernest Addison, the Governor of BoG, who was speaking at 19^th annual working luncheon of Ghana Association of Bankers (GAB) revealed that the newly created Deposit Insurance Protection Corporation (DIPC) will become fully operational by the beginning of October this year.

Dr Addison added that the BoG had already sent letters to banks to begin “a process of onboarding after agreeing on an annual premium of 0.3 to 1.5 percent of insurable deposits with participating institutions”.

The Governor also noted that deposit insurance was one of the key pillars in securing financial sector stability of the country.

He also added that the BoG, which is the project implementation authority, would support the DIPC for three years to ensure its sustainability.

According to the governor, the agreed payout in the event of bank failure and revocation of licences of banks had been pegged at GH¢6250 per customer for banks and GH¢1250 per customer for specialised deposit-taking institutions.

The Governor also said that the BoG would continue with its regulatory reforms and efforts at strengthening the internal structures of the bank to prevent complicity of staff with third parties in the course of the discharge of their supervisory duties.

The Bank of Ghana has in the recent past been initiating and implementing reforms aimed at strengthening internal structures of banks and restoring customer confidence in the sector.

Some of the reforms that have already been implemented include the recapitalization exercise which led to the closure or merger of banks that did not meet the minimum paid-up capital of US$72.93 million (Ghana Cedes 400 million) set by the BOG.

During the sectorial clean-up, the BoG also revoked the licenses of 5 banks which were dissolved to form Consolidated Bank of Ghana.

According to BOG, the current sector reforms have repositioned the banking sector as a better capitalized, liquid, strong and more resilient.