Rumours, since the beginning of the week indicates that the BoG may request that universal banks that fail to meet the new minimum capital requirement of GHS400 million apply for conversion of their operating licenses to savings and loans licenses.

The anticipated incident has set off a new bout of panic among the country’s banking public, especially business enterprises that require foreign exchange and speedy local currency financial transfers for their activities.

While the rumours may seem false, in that the BoG has not issued such a directive, but the fact is that banks that fail to meet the December 31, 2018 deadline will have the option of either seeking to convert their operating licenses or opting for outright voluntary liquidation as the only alternatives to forced liquidation through revocation of their universal banking licenses.

Although all the banks who are increasingly looking unlikely to meet the recapitalization deadline already have enough capital to meet the minimum for savings and loans licenses – or any other genre of financial intermediation for that matter, those institutions are excluded from two types of activity that are crucial to many medium and large sized corporations.

These are purchase and sale of foreign exchange and direct use of the clearing house for cheques as a payments platform.

Consequently, the latest rumours are serving to remind such business customers of the need to ensure that they are using a duly licensed commercial bank by the expiration of the deadline for recapitalization rather than an institution that is converting into a savings and loans company or is going into liquidation, whether voluntary or forced.

BoG Governor, Dr Ernest Addison recently announced that 19 of the 30 currently licensed universal banks are on course to meet the deadline with the possibility of that number increasing over the final two months.

For instance, Energy Commercial Bank is concluding its Initial Public Offer aimed at raising GHS340 million in order to meet the requirement while Omni Bank is deep in negotiations with BSIC Bank (Sahel Sahara Bank) to create a single bank with enough capital to meet the new minimum requirement.

Indeed, Dr. Addison has confessed that more banks are likely to meet the new requirement than was originally expected by the BoG.

However it is evident that some banks will not meet the deadline and the banking public is still at a loss as to the identities of those banks.

Consequently some businesses are choosing to play safe by moving their accounts to banks that have already fulfilled the new minimum capital requirement.

Instructively, the BoG recently released guidelines for voluntary liquidation of banks, having apparently learnt a lesson from the problems the Central Bank of Nigeria faced when numerous banks failed to meet its recapitalization requirements in 2005, leaving a problem as to how to ensure that their customers retrieved their deposits in an orderly manner due to the lack of established procedure backed up by requisite legislation.

Any universal bank in Ghana that fails to meet the new minimum capital can comfortably meet that for savings and loans companies, currently set at GHS15 million.

Even if the BoG goes ahead with its proposal to increase this to GHS50 million, any customer that stays with such a bank would have to buy or sell its foreign exchange requirements from a third party universal bank and do same with regards to clearing of cheques issued or received.

Indeed, it is primarily because of these shortcomings that several erstwhile savings and loans companies, and other non-bank deposit taking financial institutions have sought and acquired full universal banking licenses over the past decade.