During the 17th Annual working Luncheon organised by the Ghana Association of Bankers (GAB) in Accra on the 20th of September 2019, the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, unveiled the introduction of the Deposit Insurance Protection Corporation (DIPC). This is expected to help improve depositor’s confidence and conclude the banking sector reforms which has been ongoing for a while now.

Worldwide, deposit insurance isn’t new to the financial sector and although, an optimal global blueprint is not likely to be identified, it is still operational in many forms. Governments usually establish it as a strategy or plan of action to guard depositors against the loss of their deposits. Deposit insurance pacts are typically advance-funded, normally from a combination of government and bank sources and happens to be a prime tool in securing financial stability in the financial sector.  

In Ghana, deposit insurance is embedded in the amendment of the Ghana Deposit Protection Act 2016 (Act 931), which was passed with the aim of protecting small savings from incurring losses in the event of uninsured incidents such as the revocation of the licence of deposit-taking institutions. Per the DIPC obligations, participating entities are to pay an annual premium of 0.3 to 1.5% of insurable deposits but it shouldn’t end there. The regulator must at least ensure that membership becomes compulsory for all deposit-taking entities, set timelines for payment for which late payments and default should attract penalties, and exhibit commitment towards monitoring and supervision processes etc.

Public assurance is critical to the success of the Bank of Ghana’s moves toward restoring confidence in the Ghanaian financial sector as it promotes and enhances stability of individual banking institutions and reduces the likelihood of panic withdrawals. No level of prudential supervision can be equaled to the kind of protection that deposit insurance can afford. 

It is on the above premise that I extend an invitation to you to join our seasoned resource persons drawn from Bank of Ghana, the Registrar General’s Department, and the tax and auditing sectors for a business forum on the 23rd of October, 2019 at Volta Hall, Alisa Hotel. Come and learn more on the above as well as the opportunities embedded in the New Companies Act, and get answers to all your mind-bugging questions.