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Banking Literacy 101 – Of rumours, panic withdrawals & self-fulfilling prophesies

This post was motivated by some malicious publication on social media aimed at bringing a bank down, recent panic withdrawals fueled largely by such rumours and in very small measure by the uncertainty associated with current stringent regulatory framework in the banking industry.

  1. Ghanaians should understand that no single individual will lose their investments/deposit/savings etc in any Ghanaian BANK even if the bank goes down
  2. No single individual has lost a pesewa since the BoG withdrew the licenses of 7 Banks
  3. When some idiot with malicious intent publishes a post or spreads rumour that a bank is suffering liquidity crisis, you don’t rush to the bank to withdraw your deposit because, it’s rather the “bank rush” that causes liquidity problems for banks due to the following reasons:
  • Banks collect deposits at various time windows so if every customer or majority of clients shows up at a specific window to liquidate their investments or withdraw their savings, the bank will wobble or suffer serious liquidity crisis.
  • Another reason the bank will suffer liquidity crisis is that, banks mobilize deposits and give them out as loans to support economic activity
  • These loans the banks give out have various maturity periods or in lay terms, are given for a fixed duration.
  • Therefore, when “bank rush” happens, the bank can also not embark on “public rush” and ask for loans to be paid back immediately even if they have not reached maturity. Let’s even leave loans that have gone into past due and bad loans out of this equation.
  1. Therefore, the net effect of some of these posts is to rather force a bank which has never experienced liquidity challenges to wobble and eventually collapse
  2. It’s like a Self-fulfilling prophesy. For example, someone prophesies that you’ll have an accident and then proceeds to tamper with your car’s breaking system, so the prophesy will come true.
  3. Your RESPONSIBILITY AS A MEMBER OF THE PUBLIC is to ignore any such rumours and NOT TO SHARE these posts to help spread the rumour. If you share, you are helping to push the bank on the brink.
  4. If you are a client of any such bank, DO NOT PANIC. You can’t lose your money and YOU WON’T LOSE YOUR MONEY.


I’ll like to commend Dr. Papa Kwasi Nduom for the crusade to assuage the fears of the public and provide some enlightenment on some of these issues.

I’ll also call on the Bank of Ghana to actively develop a communications strategy towards educating the public comprehensively on basic issues affecting the industry and also be very aggressive towards helping to “protect” the image of banks.

The media also have a role to play by consciously engaging in public education as part of their own CSR.

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