https://www.myjoyonline.com/bog-directs-banks-and-sdi-to-desist-from-dividend-payment-for-2020-21/-------https://www.myjoyonline.com/bog-directs-banks-and-sdi-to-desist-from-dividend-payment-for-2020-21/

The Bank of Ghana (BoG) has revised its initial directive on suspension of dividend payment by Banks and Special Deposit-Taking institutions.

According to a public notice from the central bank, these institutions are supposed to desist from declaration and payment of dividend for the 2020/21 financial year to shareholders unless they are able to meet some conditions set out by BoG.

Proposed conditions by Bank of Ghana

The regulator noted that Banks and Special Deposit Taking Institutions shall seek prior written approval from the Bank of Ghana before declaring or paying dividends or distributing reserves to shareholders.

These institutions, according to the Bank of Ghana, in making any irrevocable commitments regarding the declaration or payment of dividends to shareholders, must also seek blessings from the regulator.

“The measures taken by the Bank of Ghana during the pandemic have ensured that the banking sector has generally remained robust and resilient,” it added.

Central Bank also reminded the Commercial Banks that they must meet the following conditions as well which includes:

1. Compliance with Sections 34 and 35 and all other relevant provisions of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930);
2. Compliance with the Capital Adequacy Ratio of 13%, Cash Reserve Ratio of 10% and Non-Performing Loans (NPL) ratio of below industry average at all times;
3. Compliance with Section 72 as well as all other relevant provisions on dividend payments as prescribed under the Companies Act, 2019 (Act 992);
4. Submission of Audited Financial Statements to the Bank of Ghana;
5. Have no restrictions imposed on its operations by the Bank of Ghana by way of Prompt Corrective Actions (PCAs) as per Act 930; and
6. The Bank of Ghana stress test results on the specific bank showing that it will maintain sufficient capital buffers after payment of dividends.

Supervision of the Banking Industry and the way forward

The Bank of Ghana, however, assured that it shall continue to monitor developments in the industry to identify emerging risk and potential threats to the safety and soundness of the banking sector.

It added, “It shall issue further notices as may be required. All commercial banks and Special Deposit Taking Institutions are to take note of the above directive for immediate compliance."

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.



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