Barclays cancels interest payments on foreign accounts Accra

Less than six months after raising the minimum savings balance to 500,000 cedis, Barclays Bank, Ghana, has said that it will no longer pay interest on foreign accounts fed with notes.

In a letter to its foreign exchange account holders, the bank said it decided to cancel payment of interest on the accounts as from May 1 because "foreign notes have no investment opportunity locally."

The letter from the Treasury Department also said the Bank of Ghana does not pay interest on foreign deposits lodged with it. "Handling foreign notes and coins is becoming increasingly expensive for the bank, as these notes have to be repatriated abroad to obtain value."

Some foreign account holders the Ghana News Agency spoke to on Tuesday described the bank's decision as "ridiculous" and expressed the hope that the Central Bank will not keep silent over the matter. Barclays Bank during the first quarter of this year raised minimum savings balance to 500,000 cedis without due consideration of the average Ghanaian worker whose salary falls far short of the amount.

The current decision by the bank is also considered by industry watchers as a disincentive to efforts by government to monitor the flow of foreign exchange since people would prefer to keep it "under their pillows" because there is no interest on deposits.