100% cash payment to depositors of collapsed entities starts

Government has since, yesterday, begun 100 per cent cash payment to all customers of the defunct savings and loans companies, finance houses and microfinance companies whose locked-up deposits were earlier settled in bonds.

The payment is in line with the government’s commitment to protecting depositors’ funds and to shore up public confidence in the financial system.

A statement released by Eric Nana Nipah, Receiver for the collapsed savings and loans and microfinance institutions, said GH₵3.56 billion, equivalent to the total value of the bond component of funding required to settle the depositors, has been released.

Customers of the 25 savings and loans companies and finance houses and that of 347 defunct microfinance companies whose locked-up funds were being settled with bonds will now receive their funds in cash.

Last month, it emerged that the government had arranged funds to the tune of GH₵7.6 billion to clean up the mess for the sake of the groaning depositors.

This included a staggering GH₵669 million for victims of the DKM Ponzi Scheme in which thousands of Ghanaians were caught, with the former President and his functionaries turning a blind eye to the financial illegality.

Already, some GH₵6.07 billion had been released to some depositors of these resolved companies in cash and bonds, leaving an outstanding amount of GH₵ 402 million to be paid to the remaining depositors.

Out of the total GH₵6.49 billion required to fully settle all valid depositor claims, about GH₵ 3.56 billion of these claims were initially settled with Government-backed bonds, until the government, yesterday, started paying all the debts in cash.

Sensitive government

Nana Nipah, in his statement, said the government made available the GH₵3.56 billion cash because it is sensitive to the concerns of customers and also in order to provide additional liquidity to the financial sector.

“It is the expectation that this additional cash of approx. GH₵3.56billion will replace the Commercial Paper which has been issued by Government in favour of affected depositors of these companies in resolution,” the statement said.

“The implication of the above is that depositors who have either received or are due Commercial Paper in partial satisfaction of their claims will now receive CASH payments at no discount for the Commercial Paper they have either received or is due to them,” the statement explained.

The statement added that “depositors who have already discounted all or part of their Commercial Paper will receive a full refund in cash of the discount they suffered.”

Mr Nipah directed the affected depositors to contact any branch of the Consolidated Bank Ghana Ltd (CBG), the paying bank, to access their newly created cash accounts which were originally designated as Commercial Paper (Bond) accounts at the bank.

While the NPP government has rescued the financial system and spent GH₵21 billion to save the deposits of 4.6 million depositors, who would otherwise have lost their savings, customers of some 82 financial institutions that collapsed during the erstwhile John Mahama administration were left to their fate.

Source: dailystatesman.com.gh/Kwasi Frimpong