Banking Clean-Up Averted Financial Sector Collapse – Bawumia

Vice President Dr. Mahamudu Bawumia asserts that the banking sector clean-up was crucial in averting a complete collapse of Ghana’s financial system.

During a recent engagement with the clergy in the Northern Region, Dr. Bawumia explained that the government had to make the challenging decision to allocate GH¢25 billion to revoke the licenses of 420 banks and specialized deposit-taking institutions. This measure was essential to protect the deposits of over 4.6 million depositors and preserve numerous jobs.

“One of the biggest nightmares I had was that it was clear that if we didn’t move to rationalize the banking system and shut down some of these banks, the whole system was going to collapse. So we had to find GH¢25 billion to save the banking system, and we saved the deposits of 4.6 million depositors by just moving their deposits to new banks like the Consolidated Bank. Otherwise, they would have all collapsed, and we would have lost so many jobs,” Dr. Bawumia stated.

However, he acknowledged that some individuals might still face difficulties in retrieving their locked-up funds due to the nature of the businesses or companies where they invested their money.

“For some of the securities like Gold Coast Securities and so on, these were investments that were made by people and not bank deposits. People basically make their own evaluations of the risks involved when investing in certain institutions. Sometimes, when they make a lot of money, you don’t hear complaints, but when they lose money, then we may hear some complaints,” he clarified.