BoG Governor, Dr. Ernest Addison
The Bank of Ghana (BoG) has described as misleading a media assertion that the country has lost US$8 billion in the last two years (i.e. US$ 5 billion in 2022 and US$3 billion in 2023) based on FinTechs and Money Transfer Operators (MTOs) withholding same at the expense of the country’s foreign currency reserves.
The Central Bank explained that Ghana has seen a consistent increase in remittance inflows year-on-year (Bank of Ghana and World Bank data).
Also, it said it does not licence MTOs since such companies are based abroad.
“The bank, however, conducts due diligence on MTOs who partner local banks and/or FinTechs to deliver remittances into Ghana as part of the authorisation process.
Furthermore, all remittance inflows are credited to the nostro account of partner banks of Payment Service Providers (PSPs), as such, no PSP holds any forex inflows from inward remittances. The partner bank credits the local cedi accounts of PSPs for onward transfer to beneficiaries,” it stated.
The BoG said it does not and has not licenced any MTO adding that Ghana does not operate two foreign exchange systems.
“Both banks and FinTechs who engage in inward remittance services do regularly submit prudential returns to the Bank of Ghana as part of their regulatory obligations. Banks and FinTechs have the responsibility of complying with the Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements,” it said.
It continued that the Bank of Ghana has the mandate to regulate all payment systems and services in Ghana, including inward remittances, emphasising the bank continues to evolve its regulatory framework to remain relevant and effective in the face of technological advancement.
Furthermore, the bank said it collects data on inward remittances from all licensed institutions and undertakes regular surveillance activities to identify any illegal operations in the remittance ecosystem.
“As indicated earlier, all foreign exchange inflows associated with remittance flows are accounted for through the submission of prudential returns by the banks to the Bank of Ghana,” it added.
The bank further debunked assertions that PSPs and MTOs were supposed to operate two accounts without recourse to their Nestro accounts.
“The statement is grossly inaccurate. Section 7 (1)c of Bank of Ghana’s Updated Inward Remittance Guidelines for Payment Service Providers (2023) clearly mandates PSPs involved in inward remittance termination to ensure partner MTOs credit remittance proceeds to Nostro account of the partner banks for onward credit to a cedi settlement account. It also stipulates that all funds terminated should be reconciled and matched within 72 hours.
However, under the 2021 Guidelines mentioned above, whereas PSPs were allowed to maintain a remittance inflow settlement account and local settlement account, all inflows were routed through the Nostro accounts of their partner banks,” it explained.
It noted that the authorisation of FinTechs to engage in remittances has not in any way complicated data collection and analysis.
“The engagement of MTOs, either by a bank or a FinTech, requires authorisation from the Bank of Ghana. Additionally, the Bank of Ghana diligently monitors MTOs that partner Ghanaian banks and FinTechs,” it added.
By Samuel Boadi