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BoG to shift its attention to savings and loans companies

By Wendy Amarteifio
BoG to shift its attention to savings and loans companies

The Bank of Ghana(BoG) has given the strongest indication that it is now set to fully shift its attention to savings and loans (S&Ls) companies in the country after the clean- up in the universal banking sector.

According to the BoG, it was ready to finalize the stock-taking exercise within the sector in its quest to ensure that those in operation meet all the requirements necessary per the demands of the law to be in business in that space.

The second Deputy Governor of the Bank of Ghana, Mrs Elsie Awadzie, announced this on an Accra radio station on Tuesday when she clarified some issues in relation to the shake-up in the universal banking space by the central bank.

“Now we are turning our attention to the savings and loans (S&L) companies to ensure that they are also doing the right thing”, she said.

According to her, after giving the companies in that space some time to clean up their institutions while the central bank dealt with the issues regarding the universal banks, it was time to take stock of their operations again and find out what they had been able to do over the period to clean up their operations.

 Second Deputy Governor of the Bank of Ghana, Mrs Elsie Awadzie

Mrs Awadzie said the central bank was keen on assessing the state of the S&Ls and to ascertain which ones were solvent and then move in to sanitize the system where necessary.

She indicated that the central bank would not, under any circumstances, shield any insolvent S&L just as was done in the case of the universal banks that fell after the intensive restructuring and recapitalization exercise.

“We have the interest of depositors at heart and we will not toy with the regulations. We do not want to see any more abuses in the system to set the economy backwards”, she said, adding that no matter how tedious the exercise will be, it will be carried out in the best interest of the sector.

Meanwhile, a banking consultant, Nana Otuo Acheampong, has welcomed the decision of the BoG to turn to the S&Ls for a clean-up of their operations.

“The decision has been on the table for some time but now that the central bank has completed work on the universal banks, it is time to turn to the S&Ls”, he said.

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He said while the move was necessary, it was important for the central bank to also ensure that it protected the savings of depositors as per the directives from the Presidency.

Presently there are 37 savings and loans companies operating across the country. The latest entrant, GN Bank, is yet to be fully accepted to be the 38th company in that space.

The minimum capital required presently to be an S&L in the country is GH¢15 million.

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