The Bank of Ghana (BoG) has indicated it would not extend the December deadline for meeting the minimum capital requirement for banks.
The strong warning is coming at a time that some local banks are pushing for President Akufo-Addo to extend the deadline by four more years to 2022.
This has resulted in the President establishing a 10-member committee which should have started working by now to look into the concerns of local banks.
BoG’s stance on recapitalization deadline
Speaking in an interview with JOYBUSINESS, Head of Banking Supervision, Osei Gyasi said there are no plans for now to review that deadline.
“Come December 31, 2018, it is expected that every bank should have met the new capital requirement,” he said.
He added that as far as management of the Central Bank is concerned that directive to banks still stands.
For some industry experts, it is clear that the Bank of Ghana would stand its grounds in terms in terms of ensuring that every bank meets the new minimum capital requirement by December 31.
This has raised a lot of questions about the effectiveness of the presidential committee that was set up to look into several challenges facing the local banks.
Key among them would be, recommending to the President to possibly extend the deadline for local banks in meeting the new capital requirement of ¢400 million.
Are more ‘troubled’ banks going down?
There have been reports that two more banks could go down soon, while another bank could be put under administration. But the Bank of Ghana has rejected this report.
According to the Mr Gyasi, the current capital adequacy ratio report and industry statistics, do not support the rumours, insisting that the industry is safe and sound.
Cost of supporting troubled banks
It is believed that billions of Ghana cedis have gone into supporting troubled banks to continue their operations.
A document recently cited by JOYBUSINESS puts the amount of liquidity support for the ‘troubled’ banks at a little over ¢5 billion.
But the Head of Banking Supervision insists, the regulator is yet to establish the cost of these actions on Bank of Ghana’s finances.
BoG is also promising to be tough on enforcing its laws going forward to ensure that depositors funds are protected.