Bank of Ghana won’t extend deadline for meeting GH¢60m minimum capital requirement for banks

…as 16 banks out of 27 meet requirement

The Bank of Ghana (BoG) says it will not extend the deadline it has set for commercial banks in the country to meet the new stated capital base requirement of GH¢60 million. The new deadline the central bank says is the end of 2012.

Meanwhile, 16 of the 27 commercial banks licensed to do business in Ghana have so far raised the new stated capital requirement of GH¢60 million as required by the regulator.

The governor of the BoG, Mr. Kwesi Amissah-Arthur told journalists during question time at a press conference of the Monetary Policy Committee (MPC), Wednesday December 21, 2011, that 16 banks out of the 27 have so far met the BoG’s capital base requirement of GH¢60 million, but there will not be an extension of the deadline for banks that fail to meet the deadline, he said.

A deputy governor of the Bank, Mr. Millson K. Narh has been cited in a report by the Ghana News Agency to have said that raising the capital requirement was necessary to enhance local competitiveness and further create a level playing field for all banks within the country’s financial sector.

He said though the higher minimum capital base provides some support for the risk absorption, the main challenge was that “banks may be pushed to search for higher returns for shareholders.”

The BoG issued new regulations in 2008 asking banks owned by Ghanaians to recapitalize to the tune of GH¢25 million by 2010 and raise it to GH¢60 million by 2012 and banks with foreign owners operating in Ghana were required to raise GH¢60 million by 2010.

By Emmanuel K. Dogbevi