No Room For Weak Banks In 2019……. Bank Of Ghana Boss

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THE Bank of Ghana (BoG) has passed as strong and well capitalised, some 22 banks and given the assurance that Ghana’s banking system will have no weak banks in 2019.

“We expect 2019 to commence with a well-capitalised and robust banking system with no weak institutions,” Governor of the Bank, Dr Ernest Addison, told journalists at the Monetary Policy Committee (MPC) press briefing in Accra yesterday.

 

 

“I can tell you that now 22 banks, which have virtually met the minimum capital requirement; we had talked about 19 or 20 banks as at the last MPC meeting but the number has increased,” Dr Addison disclosed.

The 22, he explained, “include two arrangements for merger.”

The governor said that his outfit was happy to note that many banks were close to meeting the new minimum capital requirement and “a few are concluding discussions on mergers.”

BoG insists on banks adhering to rules, regulations

Dr Addison pointed out that BoG had put in place a framework of an open and liberal system where the minimum capital requirements and other licensing regulations are set to afford players the wherewithal to operate efficiently.
“Once you are in the industry, you have to play by the rules and make sure that you meet all the prudential regulations and ensure that you are on a model that works; otherwise we take you out,” he said.

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The deadline for the bank recapitalisation, the BoG maintained was unchanged at end-year 2018, noting “the Bank of Ghana has been closely monitoring and working with the banks towards their recapitalisation efforts.”

Banks to be forced to lend more in 2019
The BoG, Dr Addison said, was confident of a major expansion in credit to the private sector going into 2019, given that “we are going to be having banks with additional capital; that capital will have to be put to use so the banks will be forced to do a lot of lending in 2019”.

According to the regulator, private sector credit grew by 11.4 percent in October 2018 compared with a growth of 14.9 percent in October 2017.

In real terms, private sector credit expanded by 1.7 percent compared with 2.9 percent over the same period in 2017.

Policy rate unchanged at 17%
The BoG kept its benchmark interest rate unchanged at 17 percent to cushion the economy against possible global pressures on emerging economies.
The decision, the third time this year, is to, according to the regulator stabilise the local currency which has come under marginal pressure in recent weeks.
“The latest assessment shows that there are underlying pressures including risks in the continuing escalation of global trade pressures, steady rise in global inflation, further hike in U.S interest rates and a strong U.S dollar,” Dr Addison said.

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