Citi Business News has gathered that President Akufo-Addo will on Tuesday April 17th form a committee to look into a petition presented by the Association of Indigenous Banks, appealing to the presidency to extend the deadline date for meeting the 400 million cedis capital requirement from the end of 2018 to 2022.
The committee will be made up of three members from the Bank of Ghana(BoG), three members from the Ministry of Finance, and a chair from the presidency.
The members are yet to be named.
The committee is expected to submit its final report to the president on 26th May, 2018.
The Association of Indigenous Banks met President Akufo-Addo on Monday, April 9, to present a favorable time table that can help them meet the requirement.
Per their petition, the local banks are pleading with the presidency to extend the deadline to December 31st, 2022.
By this the banks have made proposals to provide 170 million cedis by end of 2018, 220 million cedis by end of 2019, 280 million cedis by end of 2020, 340 million by end of 2021, and 400 million cedis by 2022.
They warned that any attempt to implement the end of 2018 deadline, may force a takeover of all indigenous banks by foreign investors who have already made proposals to the local banks.
“The current increase in the minimum capital from GH¢120million to GH¢400million announced by Bank of Ghana in September 2017, giving the banks 1 year and 3 months to comply, is too short and if the duration is not extended sufficiently, its attainment by the indigenous banks could lead to a wholesale of the indigenous banks to foreigners,” the petition cautioned.
“Such a situation will put the control of the banking industry in the hands of foreigners which could have future negative consequences on the economy particularly in the provision of credit to the agricultural sector and the informal sector in general,” it added.
The association argued that the Bank of Ghana had always used a flexible timetable in the past to increase the capital requirement of banks.
They were therefore surprised the central bank departed from the practice at a time when banks were given less than two years to come up with 280 million cedis to add to the existing 120 million cedis capital requirement.
“This can be a herculean task to achieve within 1 year. In the light of the difficulties and the demerits we have raised on each of the available options for raising the additional capital in this petition, we humbly appeal to your Excellency to extend the compliance period to 5 years structured to attain the new minimum capital of GH¢400million”
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By: Lawrence Segbefia/citibusinessnews.com/Ghana