Financial Analyst, Sydney Casely Hayford has described as needless the decision by heads of local banks to petition President Akufo-Addo over the raised minimum capital requirement by the Bank of Ghana.
The Bank of Ghana in 2017 raised the minimum capital requirement to GH¢400 million, where commercial banks in Ghana were given up to December 2018 to raise the amount, which represents a 333.3 percent increase from the current minimum capital of GH¢120 million.
But some local banks have described the time as too short a period to meet the target and has called on President Akufo-Addo to help them get an extension of the deadline.
According to the heads of the local banks, they want the deadline extended from 2018 to 2022.
"If the duration is not extended sufficiently, its attainment by the indigenous banks could lead to a wholesale of the indigenous banks to foreigners. Such a situation will put the control of the banking industry in the hands of foreigners which could have future negative consequences on the economy particularly in the provision of credit to the agricultural sector and the informal sector in general," portions of the petition sent to the President stated.
However, speaking on the recent development on Citi FM News analysis programme The Big Issue today Saturday, April 14, 2018, Casely Hayford said the action by the heads of indigenous banks in the country was needless
“It’s not a matter of whether your ownership is locally-derived…going to see the President to lobby him is a total waste of time,†he said.
He continued: “The President can’t start a bank or shut one down, he can’t regulate or supervise them [and] will not undermine the BoG governor â€
“We have too many banks chasing too little money making the interest rates high and affecting the customer. We have to stop trying to get preferential treatment by sending delegations or petitions to the President,†he added.
GH¢400m capital requirement: Comply or merge – Council of State to banks
In a related development, the Council of State has urged banks that cannot meet Bank of Ghana’s new minimum capital requirement to consider merging.
In a meeting with the Bank over a petition submitted to President Akufo-Addo by indigenous banks struggling to raise the new GHS400 million capital the Council of State unanimously supported the decision of the Central Bank.
Meanwhile, after meeting with the Governor Bank of Ghana, Dr. Ernest Addison, the Council of State said the measures instituted to ensure prudence in the banking sector is a step in the right direction and called on the Bank of Ghana to intensify its public engagement.