Business News of Fri, 13 Apr 20187
Osafo-Maafo, Alan support extension of bank recapitalization deadline
Senior Minister, Yaw Osafo-Maafo, and Minister for Trade and Industry, Alan Kyerematen, have thrown their weight behind the Association of Indigenous Banks seeking an extension of the deadline for local banks to meet the Bank of Ghana’s minimum capital requirement.
The Bank of Ghana has set 31st December 2018, for all domestic banks to meet the 400 million cedis capital requirement.
But some local banks have described the time as too short a period to meet the target. Managers of domestic banks in the country met the President to request for an extension of the deadline, for achieving the GHc 400 million capital requirement. They want the deadline extended from 2018 to 2022, but it appears some key officials in government are divided over the petition.
Alan, Osafo Marfo back extension
At the meeting which took place at the Jubilee House on Monday, the Association of Indigenous Banks made a strong case for an extension of the deadline for the capital requirement.
They warned that any attempt to implement the 2018 deadline would see most of the local banks fall in the hands of foreign investors, who have already made proposals to some domestic banks to take over their companies.
Key government officials in the meeting including Senior Minister, Yaw Osafo Marfo, and Minister of Trade and Industry, Alan Kyerematen, want the President to step in to give the local banks a chance to meet the deadline.
Togbe Afede XIV backs local banks
Another person at the meeting, Togbe Afede XIV, also threw his support behind the request by the local banks.
Togbe Afede XIV, who is also the President of the National House of Chiefs and Board Chairman for state-owned National Investment Bank, pleaded with the president to extend the date.
Also, they advised the government to give critical services such as Deposit Collections in key government institutions to local banks and not foreign banks.
Local banks propose timetable
Per their petition, the local banks are pleading with the presidency to extend the deadline to December 31st, 2022.
They warned that any attempt to implement the end of 2018 deadline, may force a takeover of all domestic banks by foreign investors who have already made proposals to the local banks.
Dr. Addison, Dr. Bawumia oppose
On the other hand, Vice President Dr. Mahamudu Bawumia and Governor of the Bank of Ghana, Dr. Ernest Addison, are two critical personalities in the meeting who opposed the decision to petition the president to extend the deadline.
The two argued that local banks can consolidate to grow their asset base if they can form an Association of Indigenous Banks.
President sets committee
After the arguments, President Akufo –Addo announced his decision to form a committee with three members from the Bank of Ghana, and three members from the Ministry of Finance with a chair from the presidency on Tuesday.
The committee is expected to submit its final report to the president on 26th May 2018.