Banks cut interest rate by 200 basis points

Banks have agreed to a general 200 basis points interest rate cut on all existing local currency-denominated loans and for all new loans to be sanctioned by member banks, the Ghana Association of Bankers has stated.

In a statement on Monday, the Association said, “This rate cut shall cover not only the period of the pandemic but Banks recognise that it will take businesses and individuals sometime after the end of the pandemic to retool and restock to achieve the semblance of normalcy – the rate cut will, therefore, cover the remaining tenor of the facility.”

This is part of the additional measures commercial banks have taken to help cushion businesses from the impact of the coronavirus pandemic.

President Akufo-Addo had earlier given an indication on commercial banks in the country reducing the interest rate by two per cent effective April 1, 2020.

Delivering his fourth national televised address March, 28,2020 on the coronavirus pandemic, President Akufo-Addo said: “We are providing additional relief, such as the extension of the tax filing date from April to June; a two per cent (2%) reduction of interest rates by banks, effective 1st April 2020; the granting by the banks of a six (6) month moratorium of principal repayments to entities in the airline and hospitality industries, i.e. hotels, restaurants, car rentals, food vendors, taxis, and uber operators.”

Reprieve to customers operating in worst-affected industries.

The Association maintained that they recognise with concern the challenges some of their clients have had to go through during the pendency of the pandemic.

“…to mention a few, we note real challenges facing the airlines and general transportation businesses; hotels and other tourism-related businesses; importers/exporters and our clients who are staff of these worst affected businesses.”

 The Association added that “given the sanctity of customer/data privacy issues, Banks have agreed to hold bilateral discussions with customers who have loan exposures with respective banks so a more tailor-made solution can be agreed with their bankers”.

“We advise customers to exercise restraint during this exercise as delays may be expected as banks will be using existing lean staff on roll to begin individual discussions on loan extensions, restructuring or other solutions respective banks will proffer to lessen the impact the virus may have caused.”

Charges on digital banking

According to the Association, “Banks have already either reduced or removed completely charges on digital banking platforms As we entreat customers during this period to switch to available digital banking platforms to enable banking halls of banks to handle limited banking services, we have decided to make the switch less painful and financially advantageous.”

The statement added, “Most fees on digital and other alternate banking channels have either been scrapped during this period or significantly reduced so customers do not have to make financial decisions on whether to switch to an alternate platform or not.”