Governor of the Bank of Ghana, Dr. Ernest Addison, has said following the announcement of the new capital requirement, the central bank has received mergers and acquisition proposals from banks in order to meet the new requirement.
The current GH¢400 million capital requirement is one that many financial analysts have predicted will push some commercial banks into mergers and acquisitions.
All banks must satisfy the new requirement by December 2018. The increment is aimed is creating huge banks that will support the growing financial demands of the economy.
“I can tell you that if you look at the structure of the banks in terms of their shares, deposits, and assets, you will find out that we have a cluster of small banks with less than 5percent shares in deposits,” he told journalists on Monday after the Monitory Policy meeting.
He added: “We expect that there will be consolidation in that sense and how that consolidation takes places we want it to be market driven.”
Moving forward, he downplayed calls by some financial players for different capital requirement for commercial banks.
Former Unibank Managing Director, Felix Nyarko-Pong for instance, advocated for financial institutions to be allowed to play in economic sectors they are comfortable with, and have the financial muscle to operate in.
Others like the managing director for Royal Bank Osei Asafo-Adjei agreed with him. But Dr. Addison said considering the financial landscape such banks should revise their banking lenience and become Savings and loans.
But Dr. Addison said considering the financial landscape such banks should revise their banking lenience and become Savings and loans.
“Apart from the banks, we also have the savings and loans. We also have the microfinance. We have all types of financial institutions that cater for the inclusion agenda. But we want banks that would have the capacity to be able to help transform the economy.
“And having financial sectors or a bank that can mobilise adequate resources and finance big-ticket transaction is crucial in being able to deliver that transformation, and this why we are emphasizing the strength of the capital of the banks. So yes, if you think that you are operating in a niche that does not require that you should have GHC400million level of capitalization you can choose to go for savings and loans license,” he replied.
Business Desk Report