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Business News Fri, 15 Sep 2017

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BoG warns commercial banks against ‘disorderly consolidation’

The Central Bank has said it will welcome mergers among banks that may not individually meet its new capital requirement but cautioned against what it called “disorderly consolidation”.

The First Deputy Governor of the Bank of Ghana, Maxwell Opoku Afari, responding to a question at Parliament’s recent Public Accounts Committee (PAC) meeting noted that the BoG will be meeting with the banks to begin talks on how to best go about such mergers if the need arises.

“Our expectation is that businesses that have been licensed as banks in the country would meet the minimum capital requirement. If by doing that they see it as appropriate to begin to talk among themselves to come about with measures and acquisitions, that is also part of the process.

“But what the Bank of Ghana would not want is disorderly consolidation so, if the banks, among themselves, decide to talk and see that as the best way for them to meet the capitalization, we are ready to have that discussion with them,” he said.

The central bank last Friday announced that banks in the country have until December 2018, to meet the new minimum capital requirement of GH¢400 million, with those unable to meet the deadline facing possible repercussions which include the loss of their banking license. The new minimum capital requirement is a 233 percent increment over the old GH¢120 million benchmark, which had some banks struggling to meet.

Only three banks out of the 34 banks currently operating in the country are in a position to meet the new GH¢400 million minimum capital requirement set by the Central Bank of Ghana (BoG) without recourse to additional capital, credit consultant, Emmanuel Akrong has said.

The list has only GCB Bank, which recently absorbed indigenous banks Capital and UT banks, as the only local bank.

The rest include Zenith Bank and Barclays Bank, which Mr. Akrong said “are the only banks that might not require additional capital to meet the minimum capital requirements for 2018.”

Source: 3 News

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