BoG proposes new capital requirements for banks

Accra, Jan. 30, GNA - Bank of Ghana on Tuesday said it had proposed an upward adjustment for the minimum capital requirement for commercial banks and non-banks financial institutions.

It said for banks, their minimum paid up capital would increase from 7.0 million GH cedis to between 50 to 60 million GH cedis. Non-Bank Financial Institutions (NBFIs) and finance houses would increase from 1.0 Million GH cedis and 1.5 million GH cedis respectively to between 5-8 million GH cedis.

Announcing this at the first Monetary Policy Committee press conference in Accra, Dr Paul Acquah, Governor of the Bank of Ghana, said the decision to increase the requirements was to further strengthen the financial sector and position it for Ghana's accelerated growth agenda. "The banking system needs to be re-capitalized to support the banks' strategies of deepening the financial sector for accelerated growth in the country," he further explained.

He said the actual time for compliance of the new requirements would soon be announced with circulars to all banks and NBFIs adding "the bank is currently working out the modality for the time frame for compliance."

A survey of credit conditions conducted by the Bank indicated evidence of improved credit conditions in terms of access and terms of credit supplies.

According to the Governor, "Banks are increasingly favouring credit to households in the form of consumer loans, small scale enterprises, while credit conditions for mortgages are tightening because of resource constraints in an increasingly competitive environment." Dr. Acquah said provisional data available indicated that there was an increase in broad money (M2+) in the fourth quarter of 2007 compared with 17.2 percent of the fourth quarter of 2006.