Gov’t secures €13m for Deposit Protection Scheme


A Deposit Protection Scheme that will help reduce disruptions in the financial system arising from banking distress and bank failure has been approved by Parliament.

As part of the scheme, parliament has approved a €13million loan agreement between the Government of Ghana and Kreditanstalt Fur Wiederaufbau (KFW), Frankfurt AM Main for the establishment of a Deposit Protection Fund, as well as a €1m grant for institutional strengthening.

The fund is aimed at protecting depositors from loss in the case of a bank failure.

It is to also support the Bank of Ghana in meeting one of its objectives of fostering the soundness, solvency and efficient-functioning of a stable, market-based financial system in Ghana.

Moving the motion for approval of the loan on the floor of parliament, Chairman of the Finance Committee Dr. Mark Assibey-Yeboah noted that the establishment of a deposit protection scheme in Ghana will make an important contribution to the maintenance of a sound and stable banking sector. This will in turn promote the development and growth of financial intermediation.

By reinforcing public confidence in deposit-taking institutions and also increasing public awareness and other initiatives that educate the public about safe methods of saving/investing their money, deposit protection can improve deposit mobilisation, the Finance Committee’s report noted.

The committee observed that €0.5million of the grant amount of €1million will be used for setting-up and institutional strengthening of the Ghana Deposit Protection Corporation (GDPC), while the remaining €0.5m will be applied toward institutional strengthening of the BoG.

The loan of €13million will, however, be strictly applied toward co-financing of the initial capital for the Deposit Protection Fund.

Counterpart Funding

As to what the Bank of Ghana is doing to support establishment of the Scheme, the committee said it was informed that the BoG is contributing an amount equivalent to €13million as counterpart funding for the Deposit Protection Fund. The Bank is also providing office accommodation, equipment, furnishing and initial staffing (secondment) for the Ghana Deposit Protection Corporation (GDPC).

Expected Benefits of the Scheme

The Scheme is expected to help reduce disruptions in the financial system arising from banking distress and bank failure, contribute to financial stability and financial inclusion, help increase confidence and trust in the financial sector, provide depositor protection and help reduce government contingent obligation in the event of bank failures.


The Ghana Deposit Protection Act, 2016 (Act 931), was passed in 2016 to establish a Ghana Deposit Protection Scheme to be managed by a Ghana Deposit Protection Corporation (GDPC). The Act also proposes the establishment of a Deposit Protection Fund for operating the Scheme.

The Bank of Ghana and the KFW are, through this agreement, providing the seed money for establishment of the Deposit Protection Fund.

Sustainability of the Scheme will be dependent on contributions of banks and specialised deposit-taking institutions.

The banks and specialised deposit-taking institutions licenced by the BoG will be required under Act 931 to make premium payments into the Fund. Again, moneys accrued will be invested to yield more funds to sustain the Scheme.

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