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We need govt’s intervention to retrieve locked-up funds – Depositors

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Depositors are petitioning the government to intervene and secure the release of their funds. Dr. Adu Antwi, the convener for the Locked-Up Investment Holders Forum, in a letter sighted by A1 Radio, is seeking the revocation of the licenses of some finance houses and savings & loan companies.

“We humbly appeal to the Minister for Finance to provide funds for the payment of locked-up funds of investors in distressed Finance Houses and Savings & Loans Companies to enable the Bank of Ghana to revoke their licenses and pay investors, in line with the Government’s commitment to protect depositors’ funds,” portions of the statement read.

In the statement, Dr. Antwi explained that the Bank of Ghana has failed to act on all previous petitions that had been sent.

“We wrote to the Bank of Ghana (BOG) on 2nd May 2023, copied the Ministry, drawing the attention of BOG to the inability of some Finance Houses and Savings & Loans Companies (FHSLs) to meet the interest and principal payment demands of their investors, in some cases for over three (3) years at the time, as a result of liquidity and other challenges faced by these institutions. We petitioned the BOG to provide liquidity support to the distressed FHSLs to enable them to meet the withdrawal demands of their customers, many of whom are pensioners and sick persons in dire need of their funds to take care of themselves.”

“We sent a proposal to BOG on 16th November, 2023, copied the Ministry, and captioned Proposal to Resolve the Current Challenges Facing Distressed Finance Houses and Savings & Loans Companies to Pay their Depositors” for the consideration of BOG. We stand ready for any further discussions BOG will wish to have with us on the proposals. Our proposed approach was based on our belief that one of the following will be adopted for the resolution of the challenges of the distressed FHSLs: Provision of liquidity support to the distressed FHSLs and restructuring them, or revoking the licenses of the distressed FHSLs and paying investors their deposits.”

The statement continued to say, “After over five (5) months of sending our proposal to the BOG and receiving no response, we staged a public protest on Wednesday, 27th March, 2024, with a march to the BOG and the Ministry. We had a meeting with BOG, but unfortunately, could not have a meeting with the Ministry as there were no officials available to meet us, even though we had informed the Ministry on 22nd March 2024 of our plan to meet the Minister. At our meeting with BOG, the Governor indicated to us that the provision of liquidity support to the distressed FHSLs was not an appropriate option, as liquidity support is given for a very short period of time. The Governor informed us that BOG intends to revoke the licenses of the insolvent FHSLs and will do so when the Ministry of Finance provides funds for the payment of the locked-up funds of investors, as was done in the case of the revocation of the licenses of some Specialized Deposit-taking Institutions in 2017/18.”

The depositors are calling for the government’s swift intervention.

“We wish to advise the government to engage some notable Development Partners for assistance in providing the financing required. The government should discuss with Development Partners contributing funds for the development of the economy, including those contributing towards the Financial Stability Fund, allowing part of the funds to be used in providing the financing required, noting that there cannot be financial market stability when investors’ funds are locked up in the financial market. We hope our petition will be considered most favorably to enable us to work to build investor confidence in our financial market and ensure financial stability.”

Source: A1Radioonline.com|101.1Mhz|Mark Kwasi Ahumah Smith|Ghana

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