Dr. Ernest Addison, Governor BoG
Some local banks are still struggling to meet the minimum capital requirement of the Bank of Ghana (BoG).
Most of the banks have not disclosed tangible plans to recapitalize.
Owing to the development, their only option is to merge or forfeit their universal banking licences.
They can also repackage themselves and operate as microfinance institutions.
Dr Ernest Addison, Governor of the Bank of Ghana on Monday, told journalists at a press conference in Accra that 19 out of the 30 universal banks operating in Ghana had met the new capital requirement announced by his outfit.
Some 10 indigenous universal banks in May this year pleaded with President Akufo-Addo to impress upon the Central Bank and the Economic Management Team to give them five years to meet the minimum capital requirement.
Many Small and Medium-scale Enterprises (SMEs) have indicated that they owe their existence to indigenous banks which advance loans them.
The local banks also retain their profits in Ghana unlike the foreign ones that repatriate theirs.
But in August, this year, government announced that it would provide financial support to indigenous banks to help them meet the minimum capital requirement of GH¢400 million by 31st December.
It, however, indicated that such support would be given to indigenous banks that are solvent, well-governed and managed and in full compliance with the Central Bank’s regulations.
Furthermore, government said such assistance could be given to banks which demonstrate that they had been unable to access private sector funds to recapitalize due to market conditions.
Dr Bediako Asare, Regional Director of the Chartered Institute of Leadership and Governance (CILG-Ghana Chapter), recently called on the Bank of Ghana (BoG) to reduce the minimum capital for indigenous banks to GH¢250 million instead of the GH¢400 million.
He said the current minimum requirement of GH¢400 million should be targeted at foreign banks just like in the United Kingdom (UK) and the United States (US).
Dr Asare made the call at the 2018 African Leadership and Governance Summit organised by CILG-Ghana in Accra.
The minimum capital requirement was increased in 2003 from GH¢2.5 million to GH¢7.0 million after which it was upped to GH¢60 million in 2007.
In 2013, the Central Bank adjusted it to GH¢120 million for new entrants.
Since last year it has been entreating the existing banks to meet the new capital requirement.
By Samuel Boadi