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Business News of Saturday, 14 April 2018

Source: citinewsroom.com

Stop meeting BoG President to extend recapitalization deadline – Assibey Yeboah

Managers of Ghanaian-owned banks have been advised by the Chairman of the Finance Committee of Parliament Dr Mark Assibey Yeboah to engage and work with the directive of the Bank of Ghana (BOG).

According to the Chairman, the directive of the BoG will help domestic banks compete on the same level on an international scale.

“I am in full support of the Bank of Ghana directives I think it is the way to go. We need stronger banks that can do big business, if you look at all the banks in the country, and look at foreign one, none of them is complaining,” he said.

The BOG has set 31st December for all banks to meet the new 400 million cedi capital requirement.

But some local banks have described the time as too short a period to meet the target.

Managing Directors and Chief Executive Officers of local banks in the country have met the president to propose a new date of 2022.

Vice President Mahamadu Bawumia and the Governor of the Bank of Ghana want the deadline maintained, but Senior Minister Yaw Osafo Marfo and Trade Minister Alan Kyeremanteng are supporting the call for an extension.

Alan, Osafo Marfo back extension

At the meeting which took place at the Jubilee House on Monday, the Association of Indigenous Banks made a strong case for an extension of the deadline for the capital requirement.

They warned that any attempt to implement the 2018 deadline would see most of the local banks fall in the hands of foreign investors, who have already made proposals to some domestic banks to take over their companies.

Key government officials in the meeting including Senior Minister, Yaw Osafo Marfo, and Minister of Trade and Industry, Alan Kyerematen, want the President to step in to give the local banks a chance to meet the deadline.

Togbe Afede XIV backs local banks

Another person at the meeting, Togbe Afede XIV, also threw his support behind the request by the local banks.

Togbe Afede XIV, who is also the President of the National House of Chiefs and Board Chairman for state-owned National Investment Bank, pleaded with the president to extend the date.

Also, they advised the government to give critical services such as Deposit Collections in key government institutions to local banks and not foreign banks.

Local banks propose timetable

Per their petition, the local banks are pleading with the presidency to extend the deadline to December 31st, 2022.

They warned that any attempt to implement the end of 2018 deadline, may force a takeover of all domestic banks by foreign investors who have already made proposals to the local banks.

Dr Addison, Dr Bawumia oppose

On the other hand, Vice President Dr Mahamudu Bawumia and Governor of the Bank of Ghana, Dr Ernest Addison, are two critical personalities in the meeting who opposed the decision to petition the president to extend the deadline.

The two argued that local banks can consolidate to grow their asset base if they can form an Association of Indigenous Banks.

President sets committee

After the arguments, President Akufo –Addo announced his decision to form a committee with three members from the Bank of Ghana, and three members from the Ministry of Finance with a chair from the presidency on Tuesday.

The committee is expected to submit its final report to the president on 26th May 2018.