BoG Receiver working to pay locked funds of depositors of MFIs

The Ministry of Finance, the Bank of Ghana (BOG) and the receiver have reached an understanding to find a way to unlock funds belonging to Rural Community Banks (RCB) deposited with Micro Financial Institutions (MFIs), the First Deputy Governor of BOG Bank, Dr. Maxwell Opoku–Afari, has assured.

He added, “Discussion on modalities are ongoing and once concluded will be announced very soon.”

Dr. Opoku-Afari gave the assurance at a ceremony to climax the 7th Rural Banking Week held in Takoradi, on the theme; ‘The role of Rural and Community Banks (RCBs) in financial inclusion.’

He told the gathering that the receivership was currently ongoing for MFIs, savings and loans and finance houses whose licences were withdrawn, and that, after the initial slow start due to poor records and documentations “we can confirm that validation has increased significantly and quite a number of depositors have started receiving their money.”

He indicated, that the government recently increased the cap on pay-outs from GH¢10,000 to GH¢20,000, to cater for about 98 percent of depositors.

“We are aware that a number of large institutional depositors(including financial institutions especially rural banks) have their funds beyond GH¢20,000 locked up and we are finding ways to unlock them.” Dr Opoku–Afari stressed.

The BOG, he said, would continue to tighten regulations, ensure stricter supervision and enforcement of prudent and statutory requirements to safeguard financial stability to protect depositors,

These measures, he assured, was to ensure that RCBs remained strong and are able to deliver effective financial intermediation, which was critical for financial inclusiveness, social transformation and poverty alleviation.

He said, the BOG was working together with MOF and the Apex Bank to address the current challenges facing the rural and community banks and also with the ARBs to tighten supervision and regulatory compliance including meeting the capital requirement to address non-performance loans.

The Deputy Governor announced that BOG had extended the deadline for meeting the minimum paid-up capital to February 28, 2020 and entreated all RCBs to put measures in place to comply with this directive to build stronger and more resilient RCBs.

Noting the significant contributions of the RCBs in community and Small scale and Medium Enterprises (SMEs) and economic growth, the Omanhene of Wassa Amenfi, Tetrete Okuamoah Sekyim II, said that since 1976, they had reduced the challenges for people from traveling long distances to secure banking services.

He, however, argued that the 200 percent increase in corporate income tax from eight percent to 25 percent, was threat to RCBs, stifle rural economic opportunities, and also affect national economic growth.

Source:Ghanaweb