The Chartered Institute of Bankers [CIB] has expressed concern that the possible increase in the minimum capital for commercial banks in the country will affect banks that focus only on particular categories of customers.
The Institute believes the targets of such banks are likely to suffer over any attempt to revise their operational strategies to meet new requirements from the regulator (BoG).
The President of the CIB, Clifford Duke Mettle tells Citi Business News the possible distortions to the strategies of such banks is also likely to affect the industry.
“The only challenge has to do with those banks that are skewing their transactions to a particular niche market and therefore want to remain a small or a boutique bank by focusing on specifically addressing the needs of a particular segment. So if you push them to increase then you distort their market because they might not have the capacity to engage in bigger projects,” he stated.
Commercial banks are now operating under a regulatory minimum capital requirement of 120 million cedis.
There are indications the central bank is likely to revise the minimum capital for the banks to about 200 million cedis.
Already, some industry analysts such as Banking Consultant, Nana Otuo Acheampong have suggested that the central bank considers introducing an economic requirement rather than a regulatory minimum capital requirement.
In his view, an economic capital requirement will allow some banks who do not necessarily have the capacity to meet the regulatory requirement the space to gradually adjust to meet such requirements at a time that their operations will warrant such increases.
The Chartered Institute of Bankers however believes that an upward adjustment of the minimum capital requirement will enable the banks undertake large scale projects and boost economic growth through the provision of jobs.
“The increase in the minimum capital requirement is good for the economy because once the banks have bigger capital, they can engage in bigger projects and they will be compelled to venture into industrialization,”
“They will therefore tweak their focus to industries and therefore you have more employment being generated and contribution to GDP,” Clifford Mettle added.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana