The Minister of Finance and Economic Planning, Mr Yaw Osafo-Maafo, on Saturday asked commercial banks to withdraw what he termed, "unnecessary charges" that were hampering Ghana's drive to becoming a competitive financial hub in the sub-region.
Mr Osafo-Maafo, who was addressing a seminar on the Draft Banking and Payment Systems Bills currently before Parliament said commercial banks in the country were exploiting their customers, saying this must be halted.
He said some of the charges could not be defended in anyway but they still existed.
The seminar, for the Parliamentary Select Committee on Finance, bankers, captains of industry and officials of the Bank of Ghana (BoG) was to provide a platform to discuss the two Bills and ensure that all grey areas in Ghana's banking industry were addressed.
He said the situation was so because the Bank of Ghana was not properly mandated to bring sanity into certain banking practices that impinge on the smooth participation of all in the financial sector.
The new Banking Bill would enhance the regulatory and supervisory capacity of the Bank of Ghana; and also ensure greater transparency in the exercise of powers conferred on the Bank of Ghana as the supervisory authority over the business of banking in Ghana.
The Minister said the banking sector was critical to the development of the financial sector and must not be left to operate insecurely.
"Indeed if our commercial banks are left to operate the way they are doing, especially as they are rejecting Cheques, nobody knows what could become of our financial sector in the sub-region."
Mr Osafo-Maafo questioned the role of banks in the cocoa sector, saying that the situation in neighbouring countries showed that banks play an active role in moving industry and the agricultural sector.
He vowed that "government will in the life of the current Parliament and the next, bring banking laws to international standards while making the sector a beacon of stability and fairness comparable to any in the world."
"Government has a vision to improve the financial sector and this should be buttressed by our own laws."
On the Payment Bill, Mr Osafo-Maafo said the situation "is more than backward".
He said the situation was worse when it came to paying for services in restaurants, water and electricity bills and inter-company operations could not be paid for by Cheques.
Dr Paul Acquah, Governor of the BoG said article 183, Section 2 of the 1992 Constitution stated among other things that: "The Bank of Ghana shall encourage and promote economic development and the efficient utilization of the resources of Ghana through effective and efficient operation of a banking and credit system in Ghana."
He said by virtue of this constitutional responsibility, the Central Bank needed an appropriate legal framework and authority and clear standards with which to exercise firm supervision and oversight over the financial system and the payments mechanisms.
The Draft Bills draw on international best practices in financial regulations, and effective Banking Supervision as advocated by the Bank for International Settlements and the Basel Committee.
Dr Acquah said the standards set by the BIS and the Committee were designed to ensure that a country's banking system reflected current international policies, practices and standards and served the purposes of financial and payments systems stability.
He said the provisions of the Banking Bill were different from those under the existing law in many significant respects.
"The Bill is more comprehensive in scope and it has introduced additional licensing requirements, new initial paid up capital, expanded permissible activities, new licensing and sanctioning procedures including deadlines.
In contrast with the existing Banking Law, this Bill sets out in clear terms, the procedure the Bank of Ghana ought to follow before it issues a banking license to an applicant."
He noted that this was an area that had been fraught with considerable uncertainty and public perceptions of the lack of transparency or fair play on the part of the Central Bank.
Dr Acquah said Ghana had no comprehensive and integrated statue governing its payment system, hence the introduction of the Payment Bill.
"This is in spite of the age-old use of cash and Cheques in the economy as well as the proliferation of various electronic payment instruments."
Giving an overview of the two bills, Mr Emmanuel Asiedu-Mante, Deputy Governor said it had become necessary to upgrade the Banking Law to meet the present time expectations of banking regulation and empower the Supervisory Authority out of its mandate effectively.
He said Section 9 of the Bill provided that the Bank of Ghana might reject an application for a banking license and give reasons for the rejection without recourse to the Minister of Finance.
"But the applicant can then seek redress with the Minister of Finance and Economic Planning if he is not satisfied with the decision of the Bank of Ghana, Mr Asiedu-Mante added.
He tabled for the consideration of the Committee, approval for certain sections to attract administrative sanctions without recourse to the courts.
"This gives the regulator a means of moving quickly and effectively to require adherence to the Banking Act and cessation of unsafe or unsound practices. Clause 53 confers power on the Bank of Ghana to issue directives to banks generally or to a specific bank or its directors from taking certain actions.
"This is to enable the Bank of Ghana to identify through early warning signals the infractions and prescribe relevant sanctions, corrective actions and directives to the banks for immediate compliance."