Dr. Ernest Addison
The Bank of Ghana (BoG) has announced plans to institute a strong compliance regime for the minimum capital requirement policy announced for commercial banks operating in the country.
Governor of the Central Bank, Dr. Ernest Addison made this known yesterday in Accra in a speech at the second day of the Ghana Economic Forum.
According to him, the new minimum capital requirement for commercial banks would come with strong policies for enforcement.
“Once we announce new capital requirement, this will be accompanied by policies of enforcement,” the Governor said.
The Ghana Economic Forum (GEF) is a two-day event themed, “Building a Ghanaian Owned Economy; 60 Years After Independence.”
It sought, among other things, to bring together over 500 chief executive officers, investors, policy analysts, and entrepreneurs to facilitate dialogue between the private sector and government.
They would take a critical look at the energy, agriculture, entrepreneurship and financial management reforms.
Reports suggest that BoG is likely to settle on GH¢250 million as the new minimum capital requirement for commercial banks in Ghana.
It is also understood that aside the new requirement to be introduced, BoG will also introduce what is being termed economic capital or risk capital.
According to the Governor, some banks have not been able to comply with the capital requirement policy over the years.
Economy
The Governor indicated that the recapitalization of the about 36 commercial banks has been necessitated by the macro-economic instability faced by Ghana over the last few years.
Dr. Addison indicated that restoring the Ghanaian economy back onto the path of growth will require the presence of a strong banking sector.
He indicated that the national economy was beginning to pick-up after suffering major shocks in recent times, noting that the current government was on track to meet its single-digit inflation target by early 2018.
According to him, the weak performance of the national economy prior to 2017 characterized by high inflation and depreciation of the Ghanaian cedi negatively impacted on the asset quality of most banks on the domestic market.
Asked whether the decision to recapitalize the commercial banks from time-to-time has been effective, the Managing Director of Barclays Bank Ghana Limited, Patience Akyianu, responded in the affirmative, but was quick to add that announcing it without enforcement cause a lot of problems for some players in the sector.
‘Worsening Quality’
Managing Director of Universal Merchant Bank (UMB), John Awuah, in a statement, said that the asset quality of most banks in the country had worsened.
He urged the Government of Ghana to support and build what he termed vibrant indigenous banks and fast-track its financial inclusion programme.
By Melvin Tarlue