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The function of the bank is heavily regulated from the
commencement of the banking commercial enterprise, which is
licensing, and often in the course of the operations of the
financial institution.
It is difficult of the role played via banks as financial
intermediaries In fact, a bank’s susceptibility to runs is the main
motive why deposit protection is necessary. In order for banks on
the way to serve their customers, they want to keep a best balance
between customers’ deposits and those they've given out as
loans.
Large Firms can forecast their cash needs and have a high liquidity
position. But banks can't do the same as their loan processes
continues throughout the year round. Therefore, banks primarily
live on depositors who comes to banks to deposit cash money. If
depositors in a single day determine to withdraw the entire amount
in from their account, the bank goes on a state of shock and it is
often seen that they are resistant to allow that.
This goal of the Act become a noble one however one wonders why the
framers either by using coincidence or intentionally determined to
deviate absolutely from that path.
The Act has a scheme of insurance to protect the deposits of small
depositors. Section 3 of Act 931 which offers for the object of the
Scheme states that it's far to defend small depositors from events
which are insurable under the Act, and to aid the improvement of a
safe, sound and stable financial marketplace.
Actually, the overall objective of the Act must have had a
non-course of action weight to the citizen as a essential point,
albeit one may additionally contend that a store security and a
loose from any capability harm budgetary market are at the entire
focusing on the guarantee of the citizen. It is glaringly the
little traders attention by Ghana Deposit Protection Act, 2016, Act
931 and loose from any hazard industrial center don't attention on
the citizen but are each for authorities advantage.
However, banks should be allowed to determine whether they need to
enroll in this same or not. In some jurisdictions, the due to the
forces on the marketplace, their membership , has turn out to be
compulsory due to the fact depositors are informed which of the
monetary establishments are member of DPC and which ones aren't and
consequently Financial Institutions are left with no choice than to
emerge as participants of DPC and boldly promote it their
membership.
The banks in Ghana concerning deposits has now not yielded maximum
results. The legal gadget in Ghana is susceptible and concern to
manipulation from both the authorities and the opinion leaders.
Investors/depositors aren't covered in any such scenario to invest
their cash. Good accounting methods, auditing and different checks
and balances might ensure easy interpretations of the law.
Enforcing policies to guide and guard depositors would provide a
safe environment for depositors to boom their financial savings