BoG Urged to Protect Indigenous banks

Speakers at a Stake holder’s forum in Accra have stressed the need for the Bank of Ghana (BoG) to endeavor to protect, especially, those which support small and medium enterprises from extinction.
They suggested that such local banks be given more time so they can use their earnings to recapitalize.

The speakers included the managing editor of the ‘Economy Times Newspaper,’ Toma Emirhe, the chief executive of the Private Enterprises Foundation, Nana Osei Bonsu, Director of research at the Trade Unions Congress (TUC), Dr Nyarko Otoo and Professor John Gatsi of the University of Cape Coast business school. Mr Emirhe, urged the central bank to strengthen confidence in the local banks.

BoG in 2017 announced an increase in the minimum capital requirement for commercial banks in the country from the current GHS120 million to GHS400 million and are expected to increase the stated capital by the end of December 2018.

BoG encouraged small and undercapitalized banks with corporate governance challenges among others, to merge and consolidate their operations.

Recently the Bank of Ghana has merged five banks, namely, UniBank, Royal, Construction, Beige and Sovereign Bank into a Consolidated Bank of Ghana Limited.

According to the Governor uniBank and Royal Bank were undercapitalized and that those banks were beyond rehabilitation.

Royal Bank, non-performing loans were high whilst Sovereign Bank obtained its license by false pretences through the use of suspicious and non-existent capital.

According to Dr Earnest Addison, BoG’s Governor, the consolidated banks will be headed by Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.