SECTORS IN GHANA WILL BE REORGANISED WITH THE NEW BANKING REGULATION

 Ghana’s central bank is tightening bank’s capital requirements because of banking crisis in the country.

On 14th August, a deal was approved by the country’s central bank called the Bank of Ghana(BOG) to allow Ghana Commercial Bank (GCB)  to take over the deposits and some of the assets of UT Bank and Capital Bank.

Because of “severe impairment” of capital, BOG announced that it had revoked the licences of the banks. Losing their licence  was a shock for all  financial sector in the West African nation. According to  some analysts this was just the tip of the iceberg and other banks were at risk.

The BoG  investigated 34  remaining commercial banks in the country, seven banks failed to meet the minimum capital requirement of C120m ($26m).

BOG  tends to be strict about there rules as it mandated that all commercial banks in the country needs to set aside C400m ($91m)  in capital  by the end of December 2018 or they would loose their licences. This figure is three times more than the previous minimum capital requirement.

according to Sam Bediako-Asante, managing director of financial market consultancy firm Sambed Consult, only four banks; GCB, Zenith Bank, Barclays Bank and Standard Chartered Bank have the capital reserve  to met the target.

He also said that “In my opinion, this development would be a positive one for the sector because we already have too many banks and if we can get into a situation where we have no more than 10 strong banks, like in Nigeria and South Africa, then it will benefit our economy.”

Customers of UT Bank and Capital Bank are now customers of GCB bank.  They were reassured by BOG  that their money is safe and they can continue to do business at their respective branches which are now the branches of GCB Bank.