Bank of Ghana to shut down or merge local banks struggling

Bank of Ghana to shut down or merge local banks struggling

- The Bank of Ghana will be announcing the closure of some local banks

- These banks are unable to meet the minimum capital bank

- The new minimum capital requirement has been increased to 400 million cedis

YEN.com.gh has learned that about five local banks in Ghana will be forced to either merge as one or close down today.

Sources close to YEN.com.gh say that the merger or closure will be based on a directive from the Bank of Ghana which wants all banks to pay a minimum capital requirement of 400 million cedis.

Already, some major local banks (UT bank, Capital Bank and Construction Bank) have all gone down following their inability to meet this new requirement.

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This development comes as no surprise especially when the association of local banks has petitioned the president to take a closer look into developments regarding the new minimum capital requirement.

The rise of the amount from GH¢120 million to GH¢400 million is believed to have been agreed after a closed-door meeting between the Governor of BoG, Dr. Ernest Addison, and some leading executives of the various banks on Friday.

The last time the BoG directed banks to recapitalize was in 2012 when the minimum capital was raised from GH¢60 million to the current GH¢120 million, representing a 100% increase in the amount.

The recapitalization of banks has become necessary following the recorded improvements in the Ghana economy, with experts describing the move as timely. The development, though, is expected to see the consolidation of some banks that may not be able to raise the minimum capital.

In 2012, after the BoG's directive to have all banks recapitalized, the likes of the Trust and Intercontinental Banks were consolidated into Ecobank and Access Bank respectively.

So far, some foreign banks have announced their readiness to pay way ahead of the December deadline while smaller banks are asking for more time to meet the requirements.

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The ten local banks in Ghana today are Prudential Bank, Royal Bank, Unibank, Beige Bank, Omnibank, GN Bank, Sovereign Bank, Heritage Bank, Construction Bank and Premium Bank.

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Source: Yen.com.gh

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