Intensify effort to clear excess liquidity - BOG

Accra, Jan. 19, GNA - The Bank of Ghana (BOG) on Wednesday called on banking institutions to intensify their deposit mobilisation drive to mop up the excess liquidity in the system.

Mr. Emmanuel Asiedu-Mante, First Deputy Governor of the Bank of Ghana said there was still a large chunk of money supply outside the banking system, which needed to be cleared.

Speaking at the launch of the Standard Trust Bank Ghana Limited, in Accra, he said holding large cash outside the banking system put inflationary pressure on the economy and thus weaken the effectiveness of the monetary policy.

Standard Trust Bank Ghana Limited, an internationally acclaimed banking institution was recently absorbed into the Ghanaian banking corridors after meeting the Central Bank requirement.

It is also the second bank that has been licensed through the collaboration of Ghanaian and Nigerian shareholders, which apparently falls within the ECOWAS vision.

Mr. Asiedu-Mante noted that the Central Bank on its part would continue to encourage the banks to develop and introduce new products and services to entice households, companies and individuals who keep sums of money at home, to adopt the culture of saving.

He urged the banks to come up with appropriate mobilisation strategies to mop up idle resources in the system.

"We are aware that the banks have engineered new products and services as wells as adopted innovative marketing strategies to mobilise these funds, but we still believe that banks need to do more to entice people to develop the savings culture", he added.

Mr. Asiedu-Mante said to ensure that only safe and suitable products were introduced onto the Ghanaian market it must enhance financial intermediation, be within the statutory banking regulatory framework and engender healthy competition among banks.

He said the deregulation of the banking system should promote effective competition to ensure efficiency in the services provided and at modest cost.

As the banks strives to move into a cashless economy by encouraging the use of special instruments and products, high tariffs and charges that deterred clients from dealing with the banks must be adjusted.

The Deputy Governor said the Central Bank would support the financial system to develop programmes and strategies aimed at deepening the financial system for rapid economic growth.

"We there fore call on all players in the financial system to effectively play their respective role in the collective national effort for sustained development within a continuously improving macroeconomic environment" he said.