The Governor of the Bank of Ghana(BoG), Dr. Ernest Addison has stated that the central bank will strictly implement the new capital requirement for banks in the country.
According to him, the bank will depart from the practice where the new capital requirement is just announced and banks are left not to meet it.
The Bank of Ghana will soon increase the minimum capital requirement of banks from the current 120 million cedis to what some industry watchers predict will be around 250 million cedis.
Some observers have urged the central bank to use the exercise to force mergers.
But speaking on day two of the Ghana Economic Forum organized by the B&FT, Dr. Addison maintained that the central bank will not force banks to consolidate but will firmly ensure that banks comply with the directive.
“Let me assure you that whatever decision that we make on the new level of capitalization, it will be accompanied by procedures for enforcement. We are not just going to announce a minimum capital requirement that will not be enforced. This has been the practiced in the past where new capital requirements are announced, the banks are given a 2 year period to meet the requirement, and they never really meet it,” he said.
He lamented that lack of clarity in the announcement of the last capital requirement resulted in some banks not adhering to the directive.
“In fact the 120 million cedis that was last announced was supposed to be for new entrants but the bank has not really clarified what that level of capitalization means for banks that already existed. We are not going to have that happening going forward”.
“Once we announce the new capital, this will be accompanied by measures of enforcement and we will do this in a very orderly manner. We are not going to see any disorderly consolidation in Ghana if this is the way that we to go,” he said.
Meanwhile the Managing Director of Barclays Bank, Mrs. Patience Akyianu who was panel during a forum at the same event has bemoaned the delay in announcing the new capital requirement.
According to her, the delay in announcing the actual requirement creates a anxiety among stakeholders in the financial sector.
“I think it is a good step in the right direction for our central bank to increase the capital. My concern is around the delay and anxiety that it’s created after they have announced an impending minimum capital enhancement, and not actually effecting it. It’s causing a lot of delay. Some of us are a bit surprise that in spite of that new banks are entering,” she said.
By: Lawrence Segbefia/citibusinessnews.com/Ghana