BoG urged to be proactive

A Director at GCB bank, Kwasi Okoh, has challenged the Bank of Ghana (BoG) to be more proactive by anticipating threats to the financial industry, and stifling them before they get out of hand.

In an interview with the B&FT, Mr Okoh expressed concern over a number of threats, particularly the rising cases of credit card fraud, asking whether the country wants to wait to bail the industry out in the manner of the microfinance debacle.

"The role of the regulator is to look ahead and say that there is a threat over the horizon and say that this is how we intend to or we are looking at mitigating that threat," he said.

"There are all sorts of new institutions that are coming into place and because of the nature of communication now, whatever that is happening anywhere else in the World could appear at our doorsteps before we know it.

Now a lot of people are using credit card and credit card fraud is huge. You know we had to bail out DKM. Are we going to bail out a credit card fraud? Shouldn’t we be ready just in case?" he asked.

Mr Okoh said to the central bank: "your style of coming to us about things that are past… take us into the future and make sure we are doing the right thing; give us guidance into the future, because it will help us make sure that we face the threat, not realise that it’s too late or it has already happened"

He also touched on the ‘Basel requirements for banks- "Basel III," asking that central bank helps banks’ to fall in line with its provisions.

Basel III is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector.

These measures aim to: improve the banking sector's ability to absorb shocks arising from financial and economic stress, improve risk management and governance, and strengthen banks' transparency and disclosures.

"There is the Basel requirements for all the banks and the deadline dates are coming. So, it is important that the banks are on point, not to be told after what they did wrong. We should be guided to do the right thing before the time comes; so, my view was to make sure that they are ready, and you are also ready and in fact ahead of us," he said.

Additionally, Mr Okoh expressed worry about the upsurge of retail shops across the world which have leveraged on their customers to set up banks, which he reckons could even be prone to hacking and other online fraud.

The laws governing banking operations have provisions regarding licensing, withdrawal of license, and arrangement for examining and monitoring banks, powers, and duties as well as protection of the supervisor.

In order to enhance the legal and regulatory framework, the Bank of Ghana supervisory functions are designed to be consistent with the Basle Core Principles for Effective Banking Supervision.