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Business News of Tuesday, 3 October 2017


Energy Bank MD kicks against segmentation of capital levels

The Managing Director of Energy Bank has kicked against segmentation of the minimum capital requirement directive for commercial banks by the Bank of Ghana (BoG). 

Christiana Olaoye said there is a need for a leveled-playing field so the argument about special banks meeting a lower capital requirement should not be an issue for debate. 

Her comments follow a directive by the Bank of Ghana (BoG), commercial banks in the country would have to increase their capital levels from the current ¢120 million to ¢400 million by December 2018. 

Speaking to JoyBusiness on the sidelines of the launch of the bank’s customer service week celebration, the Nigerian said she has seen a similar development in her native country where the same argument was put forth about. 

"In that era, we had the number of banks reduced from about 100 to 22 and is currently 23. If you want to make it a level playing field, make it a level playing field and the issue of segmentation does not arise," she stressed. 

"If banks want to play in the smaller segment, they can become micro-finance institutions or savings and loans institutions," adding these have been already taken care of in the financial inclusion system and the issue of segmentation has already been taken care of. 

She, however, indicated that measures are being put in place to ensure the bank meets the new capital requirement latest by September 2018 and may also consider mergers should the need arise. Madam Olaoye disclosed that the bank held a meeting Board meeting two weeks ago and the issue of the new capital level was top on the agenda.    "The Board is aware and they have indicated that they will bring an additional capital and they are opening up room for additional investors who want to bring in new capital.  "We are assuring our customers that definitely, we will be one of the banks that will meet the ¢400 million minimum capital requirement from December 2018," she said. 

According to her, the bank may not wait until December 2018 as it is working to with a September 2018 deadline with June 2018 likely to be when they will get the required funds.  She said they have opened their doors to other investors who want to come in through mergers or by acquiring one or two smaller banks.