BoG to settle on GHC250 million as new minimum capital

The Central Bank is set to settle on GHC250 million as the new minimum capital requirement for commercial banks in Ghana JOYBUSINESS understands.

Sources with knowledge of the proposed minimum capital increase say the Bank of Ghana is currently waiting for government’s approval before it goes ahead to announce recapitalisation plans for the commercial banks.

The Bank is expected to implement this after going through several scenarios presented to it by a committee established to look at the options of increasing the minimum capital for Universal Banks.

JOYBUSINESS understands the banks in the country could be given up to one year to meet this new capital requirement.

Sources say, apart from the minimum capital increase, the BoG will also introduce what some are calling economic capital or risk capital.

Banks are currently required to have GHC120 million as their stated capital which means the banks would have just one year to raise some GHC130 million.

Analysts say most of the foreign banks might not have a problem with this move as they might fall on foreign partners to recapitalize, however the challenge will be with local banks.

This is because some of the local banks are said to be in distress, because most businesses are delaying to pay back loans secured over the past two years.

For some the expected capital increase could greatly benefit the economy, as some local banks that might be compelled to up their capital to finance big transactions, which could help reduce capital flights.

Story by Ghana | Myjoyonline.com