Repay all loans you took from collapsed S&L & financial institutions in your own interest-GHASALC

The Executive Secretary for the Ghana Association of Savings and Loans Companies, (GHASALC), Mr. Tweneboah Kodua Boakye, has urged loan defaulters of the collapsed savings and loans companies to pay back the loans they took in their interest.

He said it would be in the interest of the loan defaulters to repay the loans they took.

He was speaking to Kwabena Agyapong on Rainbow Radio 87.5Fm, in reaction to the decision by the Bank of Ghana (BoG) to revoke the licences of 23 savings and loans and financial houses over insolvency issues.

He said some of the reasons why people refuse to repay loans are due to their direct relationship with shareholders and directors of the affected institutions.

But speaking on the issue, Mr. Tweneboah Kodua Boakye said, ‘’it will be in your interest to repay the loans you too. The institutions are no longer in the hands of the shareholders but in the hands of a receiver and so I will encourage loan defaulters to repay their loans in their interest.

The Bank of Ghana, BoG on Friday, August 16 revoked the licences of twenty-three (23) insolvent savings and loans companies and finance house companies.

The central bank in a statement on Friday said the revocation of the licences of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana had engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”

“It is the Bank of Ghana’s assessment that these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors,” the statement added.

BoG in the statement explained that the actions “were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent. The Bank of Ghana has also appointed Mr Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.”

The Central Bank says it has provided funds to ensure that the Receiver of the financial entities, whose licences have been revoked, will pay the affected customers.

“The Government has made available funds to enable the Receiver to pay depositors of the savings and loans companies and finance houses after validation of their claims. Other creditors of the failed institutions will be settled by the Receiver in line with the hierarchy or priority of creditors’ claims set out under Act 930,” the Bank of Ghana said in a statement.

By: Rashid Obodai Provencal

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