‘Avoid investing customers’ deposits in your businesses’

The Bank of Ghana is cautioning promoters of non-bank financial institutions to desist from investing deposits of their customers into other businesses in which they have controlling interest.

A Deputy Governor of the Bank of Ghana, Dr Abdul Nashiru Issahaku, who threw the caution at the inauguration of FirsTrust Savings and Loans Company in Accra, said although the law did not forbid that, there were limits that should be respected.

The Head of Banking Supervision at the BoG, Mr Franklin Belnye, who read the speech on behalf of the deputy governor, later explained to the Daily Graphic that it had come to the central bank’s notice that some securities and finance houses took funds from the public and on-lend or invested them in companies that they had majority shares in or control in.

He stressed that the basic rule was that funds mobilised from the public by such investment companies should be lent to the general public and not to fund companies they had controlling interest in.

“We have come across a few and recommended that they take steps to reduce their exposures in such companies that they have controlling interests in and comply with the law,” he said.

Formerly known as Ezi Savings and Loans Ltd, Ideal Finance Group Holdings took over the assets of the liquidity challenged firm and rebranded it FirsTrust Savings and Loans to become the new member of the Ideal Finance Group.

As part of plans to address the challenges, the new owners injected GH¢8 million fresh capital to underwrite more transactions.

It has consequently relocated the new entity to a new plush head office along the George Walker Bush Highway at North Dzorwulu in Accra.

Takeover

The Chief Executive Officer of Ideal Finance Holdings, Dr Nii Kotei Dzani, gave an assurance that measures had been put in place to make the company liquid and underwrite long-term investments.

He said the savings and loans company would also benefit from the deep balance sheet of its parent company to survive at the market place.

According to him, it was the objective of the company to lend assistance to small businesses to expand and create wealth and employment for the people.

Dr Dzani called on the government to give equal support to indigenous companies as it did for their foreign counterparts, saying the discrimination was helping to grow foreign businesses in the country at the detriment of indigenous ones.

For his part, the Chairman of the Board of FirsTrust Savings and Loans, Bishop Charles Agyinasare, advised Ghanaians to adopt the culture of savings, which he said would power the growth of the economy.