Development in Dignity: The Imperatives for Point of Death (POD) Forms in Ghana’s Banking System
Navigating the regulations regarding accessing funds of the deceased can be so daunting that many heirs and delegated family members simply abandon the effort, depriving them of funds that they should be entitled to. This significantly hinders the economic prosperity of beneficiaries who depend on such individuals for their daily breads.
In a field study conducted by the Institute for Liberty and Policy Innovation (ILAPI) on development in dignity, individuals shared how administrative barriers and red tape undermine their efforts to access funds of deceased by the Beneficiaries, Next of Kin (NoK), and Nominees to take them out of poverty. The countless institutions that engage in the process cost and time, coupled with unfamiliarity with proper documentation have taken away the freedom and rights to access funds of their deceased relatives. According to the report, 76% of the population is being pushed into inequality and poverty. This is alarming and urgent attention is needed to remove barriers to prosperity.
The arduous administrative processes to access the funds of deceased relatives, made families confess that the banking sector is the most frustrating followed by insurance and pension schemes. This is as a result of court procedures to obtain Letters of Administration (LA), unspecified documents, and the involvement of lawyers which come at a cost of which most Ghanaians cannot afford. Other obstacles include documents from state institutions such as the Births and Deaths Registry, burial permits from Metropolitan, Municipal and District Assemblies (MMDAs), medical cause of death from the Ghana Health Service among others. These appear simple on paper but can take months, and years to secure them. The offices where all these documents must be obtained are often distant from one another, resulting in beneficiaries spending thousands of Cedi on transportation but to no avail.
All the gaps and regulations identified by ILAPI are practical and happening to many vulnerable Ghanaians. Fighting poverty is not only about giving “free” food and money to the poor people but barriers like these will impoverish them more than ever.
The ILAPI 2023 Report on inheritance and access to funds of the deceased, makes several recommendations including to streamline the process which has the potential to reduce poverty in Ghana. Perhaps the most important recommendation the introduction of Point-of-Death or Payable on Death (POD) forms. The POD is where individuals with bank accounts can designate beneficiaries to inherit funds on the accounts after their deaths. People who opt for POD accounts do so to prevent beneficiaries from going through stressful bureaucratic processes to acquire probate or the LAs in court if they have passed away. The introduction of POD forms would serve to mitigate these barriers. These forms empower account holders to have the freedom to make choices and, designate beneficiaries who can seamlessly access their funds in the event of their demise. By establishing a clear and legally binding directive by the regulator (Bank of Ghana), the POD forms provide a straightforward mechanism to expedite the transfer of assets, offering a respite to grieving families and taking them out of poverty.
The advantages of embracing POD forms go beyond the individual level as it contributes to broader economic well-being. The swift access to financial resources allows beneficiaries and families to address immediate economic and financial needs. Moreover, the timely access of the funds could enable investment opportunities and entrepreneurial pursuits to foster economic growth at both the micro and macro levels.
We believe that the introduction and endorsement of the use of POD forms in the banking sector align with the industry’s commitment to customer-centricity and innovation. Implementing this policy not only demonstrates responsiveness to the evolving needs of account holders but also enhances the sector’s reputation for efficiency and empathy towards vulnerable individuals who run away from the complex legal process and wallow in poverty.
As part of poverty alleviation and economic empowerment, the adoption of such a policy would position Ghana at the forefront of economic prosperity and development in dignity, setting a precedent for other African nations to follow.
There should also be the inclusion of national identification cards when taking information about NoK, beneficiaries, and trustees for easy verifications. This will heal the identification crises leading to long investigative actions before benefits are paid.
The formulation of such a policy permits bank account holders to complete Point of Death (POD) forms, a vital step towards fostering economic freedom in the country which will go a long way to help the government reduce its expenditure on poverty alleviation programs, and to improve Ghana’s Economic Freedom Index Scores. By reducing the barriers associated with accessing the funds of deceased loved ones, and embracing POD forms will encourage a more compassionate and efficient financial environment, ultimately contributing to the economic prosperity of individuals and the nation as a whole.
Sefakor is a journalist in Ghana with interest in poverty alleviation and children’s welfare. She is the programs Assistant at the Institute for Liberty and Policy Innovation (ILAPI). Tema -Accra.