The Bank of Ghana (BoG) says it will communicate its decision on the new minimum capital requirement for the commercial banks in the country before the end of the year.
Dr. Abdul-Nashiru Issahaku, the Governor of the BoG, disclosed this at news conference by the Monetary Policy Committee (MPC) of the BoG in Accra yesterday, and said a Committee set up to decide on the new minimum capital had submitted a draft report to the BoG.
Answering questions from Journalists at a news conference to announce the new policy rate in Accra yesterday said the increase in the minimum capital requirement would help the banking industry.
The BoG this year, announced a move to increase the minimum capital requirement for the commercial banks in the country.
Currently, the commercial banks in the country are required to have a minimum capital requirement of GHc120 million.
The objective of the new capital requirement was to financially equip the banks to take on big ticket projects.
Dr. Issahaku explained that the BoG was studying the report and would soon come out with their decision.
Quizzed on how much the new amount the Committee recommended, the Governor could not disclose the figure, saying “we have just received the draft report on the issue.”
He explained that per the Basel Rules, banks which took higher risk should have adequate capital to cover the risk.
The Governor also hinted that apart from the regulatory capital adequacy ratio, the BoG was also introducing an economic adequacy ratio to be complied with by all the banks.
Dr. Issahaku explained that the new minimum capital requirement had become necessary in order to financially position the banks to finance big projects.
With the country’s oil find, he explained that the banks should increase their capital so that they could compete in the industry.
Touching on other developments in the economy, the Governor said the Ghana cedi had stabilised against the other major international trading currencies.
“The Ghana cedi cumulatively depreciated by 4.3 per cent against the US between January and October 2016, compared with cumulative depreciation of 15.5 per cent in the same period last year. The outlook for the exchange rate remains positive and the MPC is optimistic that the cedi stability would be sustained,” he said.
By David Adadevoh and Kingsley Asare