BoG refutes claims of US$8 billion remittance loss

The Bank of Ghana (BoG) has firmly rejected assertions that the country has lost US$8billion over the past two years due to Financial Technology companies (FinTechs) and Money Transfer Operators (MTOs) withholding funds.

The Bank in a statement sought to address recent media discussions regarding the involvement of Financial Technology companies (FinTechs) and Money Transfer Operators (MTOs) in Ghana’s inward remittance services and claims that the country has lost significant foreign exchange due to these entities’ operations.

“This claim is misleading and not grounded on facts,” the bank stated, emphasising that all remittance inflows are properly accounted for through the banking system.

According to the statement, Ghana has consistently seen an increase in remittance inflows year-on-year, as evidenced by data from both the Bank of Ghana and World Bank.

The central bank clarified its regulatory role, stating: “The Bank of Ghana does not licence MTOs since such companies are based abroad. However, we conduct due diligence on MTOs who partner with local banks and/or FinTechs to deliver remittances into Ghana as part of the authorisation process”.

BoG outlined the process of remittance flows, explaining that all inward remittances are credited to the nostro accounts of partner banks of Payment Service Providers (PSPs).

“No PSP holds any forex inflows from inward remittances,” the bank affirmed. “The partner bank credits the local cedi accounts of PSPs for onward transfer to beneficiaries.”

Addressing concerns about regulatory oversight, BoG reassured the public that both banks and FinTechs engaged in inward remittance services are required to submit regular prudential returns as part of their regulatory obligations. The Bank stated: “We continue to evolve our regulatory framework to remain relevant and effective in the face of technological advancement”.

The central bank also refuted claims of operating two foreign exchange systems, emphasising that all entities involved in remittance services must comply with the Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements.

In November 2023 the BoG issued Updated Inward Remittance Guidelines, providing a framework for Payment Service Providers to partner with MTOs and local banks for the termination of inward remittances. These guidelines aim to complement the role of banks in offering remittance services and provide alternative channels, such as mobile money wallets, for Ghanaians to receive inward remittances.

The BoG emphasised that FinTechs’ involvement in remittance services is limited to inward transactions only.

“It is important to note that these authorisations for PSPs are restricted to inward remittance services only, without any involvement in outbound remittance services,” the bank clarified.

Addressing data collection concerns, BoG stated: “The authorisation of FinTechs to engage in remittances has not in any way complicated data collection and analysis. The engagement of MTOs, either by a bank or a FinTech, requires authorisation from the Bank of Ghana”.

The BoG’s statement comes at a time when remittances play an increasingly important role in Ghana’s economy. With its clarification of regulatory processes and rebuttal of misinformation, the central bank aims to foster trust in the country’s financial system and encourage continued growth in remittance inflows.