Ghana plans new law to insure, protect bank depositors

Ghana is set to draft a new law that will insure and protect bank depositors, the central bank has hinted.

According to officials, the Bank of Ghana (BoG) and the Finance Ministry have “reviewed and approved the Terms of Reference for the Legal consultants to draft a Deposit Insurance law for the industry.”

Already a feasibility study financed by the  KFW of Germany has been done and the study has since been approved by the BoG, KFW and the Government of Ghana (GOG) through the Ministry of Finance, says Mr Millison Narh, a Deputy Governor of the BoG at the recently-held Annual General Meeting of the Ghana Bankers Association.

If the processes are completed and the law is passed, it will lead to the establishment of a Deposit Insurance Agency.

“It is our expectation that the Deposit Insurance Agency would become operational by end December 2014,” Mr Narh added.

Mr Narh indicated that this “could afford some protection to all depositors.”

Mr Narh stated that the BoG has developed a Supervisory Intervention Guide which seeks to provide what he describes as consistent and transparent framework for intervening in the operations of regulated deposit-taking Financial Institutions with the view to protecting the interest of depositors and shareholders.

In order to further strengthen the regulatory and supervisory regime, Narh told bankers “we have also developed guidelines and regulations which are being fine-tuned for the consideration of the sector minister and Parliamentary approval where necessary.

These include, he mentioned Corporate Governance Regulations, Licensing Regulations, Outsourcing Guidelines, Risk Management Guidelines, External Auditors Regulations, Mergers and Acquisition Guidelines.”

By Ekow Quandzie