Parliament passes Banking Bill

Accra, Dec. 18, GNA- A Banking Bill, which revises the Banking Law, 1989(P.N.D.C.L 225) in order to lay down new rules to reflect current international standards and ensure effective supervision and regulation of banking in the country was passed by Parliament on Thursday.

The Bill was passed after it was taken through a third reading moved by the Minister of Finance, Mr. Yaw Osafo Maafo on Thursday. The Bill had gone through a second consideration stage for amendment to some clauses and is intended to strengthen the operational independence of the Bank of Ghana and reduce political interference and involvement in the banking system.

"Consequently, the proposed changes will result in the curtailment of matters that require the prior approval of the Minister of Finance", a memorandum accompanying the Bill said.

The memorandum said the current Banking Law, 1989(P.N.D.C.L225), which provides the legal framework for the Bank of Ghana to regulate the business of banking in Ghana was out-dated and needed a major overhaul in order to effectively serve the needs of the banking system.

"Government recognises that a vibrant and diversified financial sector in which an efficient and competitive banking system plays a central role in making payments and mobilising and allocating savings is sine qua non for the sustainable economic development."

"The experience of successful economics suggests that for the banking system to play its desired role, it must be dynamic and responsive to the interests and needs of the economy for good quality and cost-effective financial services," the memorandum said.

The Bill is also intended to ensure greater transparency in the regulatory framework for banking. In this connection, the Bill contains clear rules and procedures for banking supervision.

"This is intended to reduce arbitrariness and the discretionary powers of the Bank of Ghana as a regulatory body so that regulatory decisions can be seen to be certain, deliberate and unbiased", the memorandum added.