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Osafo Maafo, Alan Kyerematen support bank recapitalization extension date

Yaw Osafo-Maafo-620x330

Senior Minister, Yaw Osafo Maafo, and Minister for Trade and Industry, Alan John  Kyerematen have thrown their weight behind the Association of Indigenous Banks to seek an extension of the deadline date for the minimum capital requirement for banks.

The Bank of Ghana has set 31st December 2018 for all banks to meet a 400 million cedis capital requirement.

But some local banks have described the time as too short a period to meet the target.

Managing Directors and Chief Executive Officers of local banks in the country have met the president to propose a new date of 2022, but it appears key people in government are divided over the petition.

Alan, Osafo Maafo back extension

At the meeting which took place at the Jubilee House on Monday, the association of Indigenous Banks made a strong case for an extension of the deadline date for the capital requirement.

Alan Kyerematen - Trade and Industry Minister

Alan Kyerematen – Trade and Industry Minister

They warned that any attempt to implement the 2018 deadline date will see most of the local banks fall in the hands of foreign investors who have already made proposals to some indigenous banks to take over their company.

Key government officials in the meeting including Senior Minister, Yaw Osafo Marfo and Minister of Trade and Industry, Alan Kyerematen were convinced the president must step in to extend the date to give some room for local banks to meet the deadline date.

Togbe Afede XIV backs local banks

Another important personality at the meeting, Togbe Afede XIV, also threw his support behind the request by the local banks.

Togbe Afede XIV who is also the President of the National House of Chiefs and Board Chairman for state owned National Investment Bank pleaded with the president to extend the date.

In addition, they advised government to give critical services such as Deposit Collections in key government institutions to local banks and not foreign banks.

Local banks propose timetable 

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.

Dr. Addison, Dr. Bawumia oppose

However, on the other side, Vice President Dr. Mahamudu Bawumia and Governor of the Bank of Ghana, Dr. Ernest Addison are two key personalities in the meeting who opposed the decision to even petition the president to extend the deadline date.

The two argued that local banks can consolidate to grow their asset base if they can form an Association of Indigenous Banks.

President sets committee

After the arguments, president Akufo –Addo announced his decision to form a committee with three members from the Bank of Ghana, and three members from the Ministry of Finance with a chair from the presidency on Tuesday.

The committee is expected to submit its final report to the president on 26th May, 2018.

By: Lawrence Segbefia/citibusinessnews.com/Ghana

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