Depositors Insurance Protection Corporation to start on October 1

Accra- Dr Ernest Addison, the Governor of Bank of Ghana on Friday announced that the Depositors Insurance Protection Corporation (DIPC) would become fully operational effective October 1, 2019.

The deposit insurance, he said, was one of the key pillars in securing financial sector stability and further boost depositors’ confidence and lock-in the reform process.

Dr Addison made the announcement at the 17th Annual Working Luncheon organised by the Ghana Association of Bankers in Accra.

He explained that as amended, the Ghana Deposit Protection Act 2016 (Act 931) was enacted to protect small savings from losses incurred as a result of the occurrences of an insured event such as the revocation of a Deposit Taking Institution’s license.

Dr Addison stated that the Act also supports the development of a safe, sound, stable and efficient market-based financial system.

In the process of operationalising the DIPC, the Bank had already sent letters to banks to begin a process of onboarding after agreeing on an annual premium of 0.3 to 1.5 per cent of insurable deposits with participating institutions, he noted.

Dr Addison said the Bank of Ghana, which was the Project Implementation Authority, would support the DIPC for three years to ensure sustainability.

The agreed payout in the event of bank failure and the revocation of licenses have been pegged at GH 6,250 per customer for banks and GH 1,250 per customer for Specialised Deposit-Taking Institutions, he said.

Going forward, we expect access to credit to be on a predictable and cost effective terms, as part of the benefits of the reforms and this week we have met with every bank and discussed ways in which these results can be realized by the end of the year.

And such a successful outcome would depend on macroeconomic policies and reforms in the financial sector. But it will also depend on the private sector’s own initiative, resourcefulness, and capacity to take advantage of opportunities that have been created by the reforms.

Alhassan Andani, the President of the Ghana Bankers Association, said the Association was excited about the operationalisation of DIPC and had taken it on board.

We are absolutely happy about it. It is functional. We have made our assessment and we will be making payment before the end of September. The banks will not pass on the cost to customers; we will absorb it as our operational cost, he added.

Source: Ghana News Agency