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Bank Of Ghana To Begin Deposit Insurance Scheme Implementation

The Bank of Ghana (BoG) has indicated plans to begin implementation of the Deposit Insurance Scheme as from the second quarter of this year.

The central bank’s governor, Dr Ernest Addison,  made the announcement when addressing the first Graphic Business/Stanbic Bank breakfast meeting of 2018 with the theme ‘Deposit insurance: A catalyst for a stronger banking industry’ held yesterday.

Addison said that the idea of the scheme was to have an additional layer of protection to what the central bank normally does to protect and provide enough oversight over the financial sector.

He said the country could have the most prudent application of banking rules, have the most effective oversight over the financial sector but still needed “deposit insurance scheme to provide the added safety net to boost confidence in the financial sector, especially the small depositors”.

According to him, it was in furtherance of the BoG’s financial system stability goal that it raised the capital requirements of banks, adding that “we expect that in a strong and well-capitalised bank, the sector will be well positioned to offer safer services”.

On the arguments about the new capital requirement and that foreign ownership of banks were more dominant, Addison said that data at the Central Bank did not suggest that control in the banking sector.

He explained further that apex banking institution would like to see a country which is economically diversified and which can have a financial sector that is capable in assisting in structural transformation of the economy.

It would be recalled that the Parliament in 2016 passed the Deposit Protection Act, which seeks to establish a deposit insurance scheme to protect depositors in the event of failure of a bank.

The scheme seeks to safeguard the savings of individual depositors to build trust in the formal banking system and to contribute to the stabilisation and development of the financial system in the country, , among other aims.

 

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