Call it ‘marriages of convenience’, several banks are engaged in a race against time to complete mergers with each other in other to meet the deadline for Bank of Ghana’s minimum capital requirement.
However, a Banking Consultant has said the Bank of Ghana may give some ‘waivers’ to commercial banks that have made effort at merging but may miss the deadline in order for them to complete the process.
Speaking on PM EXPRESS on JoyNews channel on Multi TV, Nana Otu Acheampong said, “The timeline that we have now I put it as 21 December. After 21 December, you don’t have many working days. But what I suppose the regulator wants to see is that; yes, I’ve made an effort to get married and so they might want to give a bit of leeway but not an extension of the deadline.”
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Going back into history, and looking at past releases of the Bank of Ghana gathered from the archives, the increase being proposed (almost 234 per cent) represents the biggest in the history of the banking sector in Ghana.
Following the promulgation of the Banking Law 1989 (PNDCL 225) when the first capital requirement was set at a minimum to paid-up capital equivalent to about $740,700 was set, increases that have come through thereafter have not matched this proposed new increment of GHc400 million.
In 2003, the Bank of Ghana (BoG) issued a directive to commercial banks to increase their capital to a minimum of ¢7 million as part of measures to strengthen their capital base.
In 2008, it increased the capital to ¢60 million in a bid to make the banks more resilient against unforeseen or expected losses.
The Central Bank later proposed ¢120 million for new entrants and later asked the existing banks to increase their capital to that level.
The Bank of Ghana again in September last year, issued a directive for banks to recapitalize to GHc400 million or lose their operating licenses after December 31, 2018.
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