COVID-19: Bank of Ghana suspends declaration of dividends by banks for 2019/2020 financial year

COVID-19: Bank of Ghana suspends declaration of dividends by banks for 2019/2020 financial year

- The Bank of Ghana has directed all banks and Special Deposit Institutions to refrain from paying dividends for the 2019/2020 financial year

- It explained that the move is to ensure the financial institutions have enough resources to operate as the coronavirus continues to spread

- It added that it would continue to monitor the situation and give further directives in due time

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The Bank of Ghana (BoG) has suspended the payment of dividends by banks and Special Deposit Institutions for the 2019/2020 financial year.

The instruction comes at a time when Ghana is combating the coronavirus which has adversely affected the financial sector.

Shareholders of the stated institutions are therefore not expected to receive dividends for the period in question.

READ ALSO: COVID-19: BoG cancels charges on MoMo transactions GHc100 and below

A press statement released by the BoG to that effect also indicated that banks and SDIs are not expected to make any irrevocable commitments regarding dividends until further instructions are given.

The Central Bank went on to state that the decision is in line with a plan to ensure that such institutions are well-positioned to withstands the economic effects of the coronavirus.

The core aim, it said, was to “to absorb any potential operational losses for banks and SDIs from the COVID-19 pandemic”.

It is also hoped that the banks and SDIs are able to provide support for their customers for as long as the pandemic lasts.

The BoG explained that for the avoidance of doubt, the shareholders in this context refers to “holders of Common Equity Shares (CET1) and Additional Tier I (AT1) capital instruments of banks and SDIs”.

It stressed that exceptions would only be granted to financial institutions that satisfy the regular prudential requirements and are not relying on additional liquidity released by regulatory reliefs provided by the BoG.

The Central Bank gave the assurance that it would continue to observe the evolving impact of the pandemic on financial institutions and their clients and would provide guidelines as and when needed. earlier reported that the BoG has released a statement in relation to the coronavirus which has infected people and led to the loss of lives all over the world.

The statement, released on Monday, March 16, 2020, gave the assurance that measures have been implemented to assess the effect of the coronavirus on the economy.

It added that a three-day Monetary Policy Committee (MPC) meeting has been fixed in order to examine the situation and introduce directives on the way forward.

READ ALSO: COVID-19: BoG's Monetary Policy Committee reduces policy rate to 14.5%

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