Customers of defunct microfinance firms, Savings and Loans, and Finance houses will from today, September 16, 2020, receive full payment of their locked up funds in cash.
The government has released a total of GHS3.56 billion in cash to fully settle depositor claims of the 347 defunct Microfinance companies, 23 Savings and Loans, and Finance houses that are being settled with bonds.
Affected customers have been directed to visit any branch of the Consolidated Bank Ghana Limited to receive their monies through the new funding arrangement.
A statement by the Receiver, Eric Nana Nipah says customers who have either received or are due commercial paper in partial satisfaction of their claims will receive cash payments at no discount for the bond they have already received.
Meanwhile, depositors who have already discounted all or part of their bond will now receive a full refund of the discount they have suffered in cash.
“Notice is hereby given that with effect from Wednesday 16 September 2020, affected depositors may contact any branch of 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”, the statement directed.
GHS6.07 billion had already been released to some depositors of these resolved companies in cash and bonds.
This had left about GHS402 million to be paid to the remaining depositors.
Of the GHS6.49 billion required to fully settle all valid depositor claims, about GHS3.56 billion of these claims were initially settled with Government-backed bonds.
But there were concerns that this method, the non-interest-bearing nature of the bond and tenor of five years, “does not make the Bond commercially attractive, thus creating a significant loss in value of their claims to them.”
“Sensitive to these concerns and in order to provide additional liquidity to the financial sector, the Government has made available to the Receiver/Official Liquidator additional cash amounting to approx. GHS3.56billion,” the statement said.
Thus the depositors who were to be paid in the bond will now “receive cash payments at no discount for the Commercial Paper they have either received or is due to them.”
On May 31, 2019, 347 microfinance companies had their license revoked by the Bank of Ghana as part of the financial sector cleanup.
The Bank of Ghana, on August 16, 2019, also revoked the licenses of 23 insolvent Savings and Loans companies and Finance Houses.
These actions were in line with Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the license of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.
Story by: Elizabeth Lebene | universnewsroom.com