The central bank has directed banks and other specialised deposits institutions to, as a matter of urgency, desist from paying facilitation fees to middlemen or agents that assist in securing wholesale deposits.
The Bank of Ghana in a statement issued on Wednesday said it made the observation during the recent banking industry clean up exercise.
According to the bank, a facilitation/business development fees or some other payments are made to agents who assist in the mobilization of Wholesale Deposits, particularly from the public sector.
“The practice had the tendency to increase the “Cost of Funds” of institutions, which invariably was passed onto customers through high lending rates,” the statement said.
The Bank of Ghana warned banks and SDIs to immediately stop the payment of facilitation/business development fees or any other fees to attract deposits henceforth.
The statement continued that any financial institution that is caught flouting this directive will be “severely” sanctioned.
“The Bank of Ghana wishes to draw the attention of Banks and SDIs to Section 16 (1) (f) of the Banks and Specialized Deposit-Taking Act, 2016 (Act 930) which gives the Bank of Ghana authority to revoke the licence of any institution which in the judgement of the Bank of Ghana, is deemed to be engaged in unsafe or unsound banking practices,” the statement concluded.