Local banks reduce staff to meet GH¢400m minimum capital

Local banks reduce staff to meet GH¢400m minimum capital

- Commercial banks are intensifying efforts to meet the new minimum capital requirement

- Reports say many indigenous banks are working out modalities to drastically reduce their staff strength in other to meet the GHC 400 million minimum capital

The Bank of Ghana has set a new law that says all commercial banks should have a minimum capital of GH¢400 million before they can operate.

Prior to this new law, the banks had a minimum capital requirement of GH¢120 million. The increase to GH¢400 million represents a 233% increase.

The new law as introduced by the governor of the BoG, Ernest Addison, is to strengthen the banking sector which has already seen some volatilities with the takeover of at least three local banks.

Local banks reduce staff to meet GH¢400m minimum capital

President Nana Akufo-Addo. Source: presidency.gov.gh

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According industry players, the new directive will lead to more that 3,000 professionals in the banking space losing their jobs. This is also expected to further worsen the unemployment situation in the country.

Already, following the takeover of two universal banks by the Bank of Ghana (BoG) through the GCB Bank, approximately 1,000 professionals in the banking sector have lost their jobs.

Sources within the 10 indigenous banks which are most likely to suffer under the new directive told the Daily Graphic on condition of anonymity that “we presently have no choice but do what we can to save our banks from being taken for cheap.”

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They claimed that the intention of the BoG was to solve a problem but it was likely to create a bigger challenge for the economy, which was already struggling to absorb the millions of idle hands looking everywhere to find jobs.

Meanwhile, The Finder Newspaper on Monday, reported that the Beige Bank has laid off over 500 of its staff as part of measures to restructure the company in anticipation of current changes within the industry.

It is expected that a few more lay-offs will happen in the coming months as the Beige Bank aligns itself for a possible merger.

According to the newspaper report, this is the first time the company has had to cut staff numbers of this magnitude since its inception 10years ago.

Branch expansion plans in other remote parts of the country have also been suspended.

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Source: Yen.com.gh

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