March 10, 2016

Majority Leader, Alban Bagbin, says the defense put up by the Bank of Ghana (BoG) not to bailout depositors in the DKM Diamond Microfinance debacle is unacceptable because it was the central bank’s negligence that caused the whole saga.

Governor of the Bank of Ghana (BoG), Henry Kofi Wampah, Tuesday, told Parliament that the central bank has no bailout package for victims of DKM Diamond Microfinance Company fiasco because they did not invest wisely.

He further told the August House that although DKM’s 50% interest on deposits for two months was unsustainable, customers could have done better with their investment if they had conducted due diligence into the operations of the company.

“When you have a million Cedis and you place the funds in a very risky institution, you can only get what is guaranteed”.

“To be able to do due diligence and know where to place your funds is necessary. They (depositors) were expected to have to known better and invested wisely” he said when addressing the House over the circumstances that lead to the closure of DKM and whether it was possible to offer depositors a bailout package.

However, Bagbin, who doubles as the Majority Leader of the legislature, told Wampah that the central bank cannot escape blame in the DKM debacle, insisting that it was the BoG that rather shirked its oversight and regulatory responsibilities.

“In this scrutiny you are trying to extricate yourself from liability at all after you’ve been through some of the actions and in-actions of the bank itself. The levels of liabilities differ. So, when you say they should have known, they should have done due diligence; how are you going to do due when a license from the Bank of Ghana is authorizing that company to operate?”

“What kind of due diligence do you need to do again? And we have confidence in the Bank of Ghana. So, to create the impression that the Bank of Ghana cannot be held liable and you know it is a long process and you think that the process is one of legislation that when you file you are looking at ex-pates, the bills and to try to respond to the directive of the President, I beg to differ. It cannot be”.

“We believe strongly that in this matter, the Bank of Ghana is culpable. We believe strongly that the Bank should bailout depositors and that action should be taken expeditiously”, he noted.