The Ghana Association of Banks is urging banks whose capitals are below the minimum capital requirement to quickly build it up to meet the right requirements proposed by the Central Bank.
The Association maintains that this will also boost their businesses.
This comes as the Bank of Ghana has given banks up to the end of September 2023 to provide their recapitalization plans.
Welcoming the call in an interview with Citi Business News, Chief Executive Officer of the Ghana Association of Banks, John Awuah said the move is critical to ensuring economic recovery.
”Just around the time we signed the debt exchange documentation, the Governor gave banks some relief on capital, on when they are supposed to build up capital, so what the governor is saying is that they want to know, when capitalization will be coming in so they have good visibility of the plans of the banks, in terms of capital accumulation and attracting capital to build the right buffers.
“I think it is in the right spirit of building the base that can support economic recovery. Our view is that it should be within the release period, except that if you are a bank and your capital is below the regulatory minimum, it’s is in your own interest that you move quickly to beef up your capital levels so you meet up the regulatory requirements to build the right capital buffers to enhance your businesses,” he said.
BoG directs commercial banks to recapitalize by September
Governor of the Central Bank, Dr. Ernest Addison earlier this week said banks in the country have been given September of this year to show proof of their re-capitalization plan.
Answering questions during the 112th Monetary Policy Committee (MPC) press conference in Accra, Dr. Addison said the Bank of Ghana will follow up on the directive.
“Most banks are working towards that, and they have been given a period I think up to September 2023 to submit to us [BoG] as to what their recapitalizations are, and we will be following up on that. To ensure that instead of banks distributing profits that they have started making, use those resources to rebuild their capital buffers,” Governor of the Central Bank, Dr. Ernest Addison noted.