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Avoid business with unlicensed financial institutions – Bank of Ghana

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Bank of Ghana3The Bank of Ghana (BoG) has announced that deposits made at unlicensed institutions are at the risk of the depositor and as such the Government or BoG would not be responsible for such deposits.

It said institutions like Little Drops, Prosperity and Good Health Develop Winners, Royal Foundation Global Leads, Royal Care, Marceph Wealth, JODEQ Network Clear Image and Divine Rain were not licensed and regulated by the Bank, and therefore it had no control over the operations or interest payment promises to clients by such institutions.

The announcement by the Bank follows reports that some companies involved in illegal micro-finance operations in the Volta Region had succeeded in convincing customers to part with various sums of money.

“Clearly, as unlicensed institutions engaging in deposit mobilization or any other activity akin to banking, they were in breach of Section 4 of the Banking Act, 2004 (Act 673)”, said a statement from the Communications Department of BoG and copied to the Ghana News Agency (GNA).

“The Bank deems the activities of the aforementioned companies as reported, as purely fraud disguised as some form of banking business. The Bank is liaising with law enforcement agencies to trace and bring the perpetrators to book”, the statement said.

It added that a number of unlicensed operators of similar schemes in the Volta Region had been apprehended in the past and reported to the law enforcement agencies.

According to the statement, Little Drops, Prosperity and Good Health Develop Winners, Royal Foundation Global Leads, Royal Care, Marceph Wealth, JODEQ Network Clear Image and Divine Rain adopted clandestine movements that made them known only to their clients who were, perhaps, lured by the high interest promise.

It said those companies had ceased operations and could not be traced by those who knew where they were.

“The activities of private companies and individuals who deceive the public with phony money schemes are of great concern to the Bank, for which reason tighter surveillance activities have been introduced”, it stated,

It urged the general public to, as a collective responsibility, help check the activities of such criminals by reporting to the BoG or the Ghana Police any institution operating without a license, or where they believed licensed institutions may be breaching the laws and regulations governing the conduct of their business.

This, the statement said, would assist the BoG, in partnership with security and law enforcement agencies, to take the appropriate and timely corrective actions to prevent further damage to the financial system.

It advised members of the public to do business with only licensed institutions in the country, by first inspecting their license  which must be displayed in their banking halls, and that all micro-finance companies licensed by the BoG would include the word ‘micro-finance’ in their registered name.

They should also be cautious when dealing with companies offering abnormally high interest on deposit. “Any savings interest rate which is abnormally higher than Government Treasury Bill rates should be a signal that the potential risk is high”, the statement indicated.

Source: GNA

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