The Council of State has advised indigenous banks to consider merging to be able to meet the Bank of Ghana’s 400 million cedis minimum capital requirement.
The advice comes after a petition was presented by the Association of Indigenous Banks to the Presidency, appealing for an extension of the deadline for meeting the capital requirement from the end of 2018 to 2022.
In the petition to the President, all the Managing Directors and Chief Executive Officers of the local banks said they were in a better position to recapitalize up to GH¢170 million by the end of 2018, GH¢220 million by the end of 2019, GH¢280 million in 2020, GH¢340 million in 2021, and GH¢400 million in 2022.
For now, it is unclear when the request will be implemented as the banks have till December 2018 per the schedule provided by the Bank of Ghana.
In September 2017, the BoG demanded of the universal banks to up their capital to GH¢400 million. It gave them one year three months to fully comply with the deadline in December 2018.
The reason given by the central bank for that directive, was to among other things, get the banks to be able to undertake big-ticket transactions.