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Business News of Friday, 1 June 2018

Source: citifmonline.com

Present plans for mergers - BoG to struggling banks

The Bank of Ghana (BoG) has asked all local banks that may not meet the 400 million cedis capital requirement to present their plan for mergers.

This, according to the central bank is to create space for the banks to consolidate their operations with the other entities after December 31st, 2018.

The Governor of the Bank of Ghana, Dr Ernest Addison disclosed international TV network, CNBC.

He observed that local banks that are struggling to meet the capital requirement had been directed to show their merger plans that will be implemented over a period. “We have put on the table that the banks that are not able to raise that capital should come together in the form of mergers and we are ready to accept an indication of how you intend to put yourself together to meet that minimum capital requirement,” he stressed.

“The idea is not to say that these banks should completely merge by the end of 31st December. I know there are operational capital difficulties in doing that, integrating the IT system, staff, and all of those things. Those are operational issues that can be dealt with in the longer time frame,” he added.

Dr Addison stated that the banks must show some commitment to merge since the central bank is not going to extend the deadline.

He explained that such a move would give the BoG a clear view to move into its next line of action.

“We just want the banks to come up with the indication that, this is what we are planning to do. These are the banks that are planning to come together and then the rest will be implemented over a longer period. So implementation is not necessarily for December 31st, but you need to make that conscious decision,” he said on the CNBC network.