The independence of the Bank of Ghana (BoG) must be allowed to prevail even as appeals are considered from local banks for an extension of the deadline for recapitalization.
This should also build a strong financial sector with the capacity to support economic growth.
That is the suggestion from Financial Analyst, Professor Godfred Bokpin.
His comments come on the back of President Akufo Addo’s meeting with the Managing Directors as well as CEOs of all the local banks over their call to get the deadline for the 400 million cedis capital requirement, to be extended by four years to 2022.
The local banks have among others, cited unfavourable competition from their foreign counterparts in meeting the December 2018 deadline to back their appeal.
But Professor Godfred Bokpin tells Citi Business News the government must be cautious with its plan on the requests.
“I want to believe that the President will take their concerns in good faith but I do not think that it is something that the President would take a decision and say this is the way. The President would have to relay their concerns to the central bank in order to also maintain the operational independence of the central bank. The central bank will then in consultation with the two banks will discuss and see the way forward,” he explained.
Though Professor Bokpin suggested that the requests may be upheld depending on the prevailing conditions, he believes the appeals have been influenced in reference to earlier mechanisms adopted by the Bank of Ghana to get banks to recapitalize to the present 120 million cedis.
“In the times past, the local banks had different times in meeting the minimum capital requirement (120 million cedis) compared to the foreign banks. Probably if that is what they are asking for, then I think it should be possible for that to be looked into and the parties will see how they will resolve the situation.”
The Bank of Ghana in September 2017 directed that all commercial banks increase their minimum capital from 120 million cedis to 400 million cedis.
This represented about 233 percent increase.
The central bank also announced that the banks have till December 2018 to meet the requirement or face possible sanctions.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana