Bank of Ghana announces new minimum capital requirements for new entrants

The Bank of Ghana has announced an upward revision of the minimum capital requirements for new industry entrants.

According to the Bank of Ghana, it has raised the minimum capital for new commercial banks to GH¢120 million as well as new requirements for the non-bank financial institutions (NBFIs) and rural banks.

“In this regard, the minimum paid-capital for major banks have been revised from GH¢60 million to GH¢120 million while that of NBFIs increases from GH¢7 million to GH¢15 million. That of the rural banks have been upped to GH¢300,000,” Millison Narh, First Deputy BoG Governor, announced at the 32nd Annual General Meeting (AGM) of the Ghana Association of Bankers (GAB) in Accra August 15, 2013.

Mr Narh explains that “Developments in the macro-economic front have necessitated the need for the Bank of Ghana to review the minimum capital requirements for new industry entrants.”

He added “These increases are necessary in order to provide our institutions with the muscle to undertake big-ticket deals to support the growth of the private sector and to further serve as a capital cushion for absorbing unexpected losses that may arise in the normal course of business.”

Mr Narh, therefore advised industry players, particularly the banks, to properly align their risk appetite to their capital levels. He says “This is important because any misalignment between risk and capital could threaten the solvency of the institution and unduly put shareholders investments at risk.”

Subsequent to these capital enhancements, the BoG says it has initiated action towards gazetting the increases as required by law.

The Managing Director of the Ghana Commercial Bank (GCB), Simon Dornoo was elected the new President of the GAB.

He replaces HFC Bank Boss, Mr Asare Akuffo.

By Ekow Quandzie