Time’s up! 5 banks likely to lose licenses

Business News of Monday, 31 December 2018

Source: Myjoyonline.com

2018-12-31

Governor of the Bank of Ghana, Ernest Addison

At least five commercial banks in the country could lose their universal banking licenses later this week as the December 31 deadline to meet the new capital requirement draws to a close.

The Bank of Ghana raised the new capital requirement to GH?400 million this year as part of firm measures to create a robust banking sector.

However, as at the close of work Friday, December 28 some had not met the new capital levels despite some last-minute maneuvers, according to persons close to the regulator.

Second Deputy Governor of the Bank of Ghana, Elsie Awadzi, has, however, revealed that 20 banks have met the capital requirement.

Joy Business Editor, George Wiafe, reports that the five banks at the brink of losing their operating licenses “are strongly lobbying for last-minute government intervention.”

Meanwhile, Graphic Online is reporting that the government is set to announce a GH?2 billion bailout package for some six indigenous banks to enable them to meet the recapitalization deadline.

“The package was hurriedly put together this month for the six, which are seen as well-governed, solvent but unable to meet the BoG GH?400 million new minimum capital for banks on their own, multiple sources familiar with the arrangement have told Graphic Online,” the online portal reported, Monday.

‘Compliance is the order of the day’

However, Economist at the University of Ghana Business School, Prof Godfred Bokpin, has said the central bank has remained firm on the December 31, 2018 ruling out the possibility of a last-minute bailout for banks struggling to raise the new capital level.

“Compliance is the order of the day,” he said Monday.

He added: “It is a bit too late for us to be in the last working day of 2018 and we are wondering which bank has met the requirement which bank has not. I think there should have been an earlier statement a week ago or so clarifying all these issues.”

He said by not issuing a clear statement about the banks that have met the requirement, the central bank risks causing panic in the sector.

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