Banks urged to meet BoG criteria for dividend payment to shareholders

Banking Consultant, Nana Otuo Acheampong has urged banks to work assiduously to satisfy the six minimum criteria set by the Bank of Ghana, BoG, as preconditions for the payment of dividends to their shareholders.

The Central Bank in a new notice to Banks and Special Deposit Taking Institutions (SDI’s), urged the institutions to desist from declaring or paying dividends or distributing reserves to shareholders for the 2020 and 2021 financial years unless a number of minimum criteria have been satisfied.

Speaking to Citi Business News on the new directive, Nana Otuo Acheampong warned of the consequences of non-payment of dividends to shareholders on a consistent basis.

“Dividend payment forms part of how a company is valued, and therefore we have something we call the clientele effect of dividend where if you don’t pay dividend for one or two years, the chances are that some of your investors will decide to sell and buy shares that will pay the dividend.”

“So my advice is that the banks that want to pay dividend should ensure the six minimum criteria set out by the Bank of Ghana to enable them pay dividend to their shareholders,” he added.