Banks warn BoG over minimum capital requirement

CEOs of some banks have cautioned the Central Bank to be circumspect in the implementation of the soon-to-be-announced increase in the minimum capital requirements.

According to them, it will be wrong for all commercial banks to be forced to pay the same amount.

Some SME-focused banks expressed fear that the new capital requirement will force them to compete with other players which focus on large and multinational companies.

Thus the Chief Executive Officers for uniBank and Royal Bank warned the Central Bank against wholesale implementation of the policy.

Speaking at the opening of the Royal Bank new branch at Kinbu, the Central Business District of Accra, the CEO for the bank, Osei Asafo-Agyei told Starr Business that the BoG must focus on the key ratios.

“If you go to the UK for instance; yes they have capital regulation but I don’t think that is the most important thing. The most important thing is that, whatever capital that you have, it is the ratios that govern your performance which is most important.

“If it is capital adequacy, they make sure that your capital adequacy is always above the minimum; for me I think that is most important,” Mr Asafo-Agyei said.

He added: “Pushing all banks to become universal big bank for me will not be the way to go for this country.”

Some banking analysts have proposed that the minimum capital be raised between GHC 500- 800 million. This, they believe will strengthen the books of banks to support economic growth.

On his part the CEO of uniBank Felix Nyarko-Pong said the recapitalization must not focus on forcing banks to merge.

He told the B&FT that “If I want to do small businesses or SMEs, I should not be forced to raise the big capital that the infrastructure focused banks should raise. Nobody should force you. Why have we liberalized the market?”

He added that, “as for capital, if you have more, irrespective of the business you are, and you have profitable businesses to invest in, it is good. Even though there are a lot of opportunities, if my competence and need can only service this segment of clients, then I should be allowed to do it. You have to stay in your core competence zone.”