Bank of Ghana’s recapitalization directive commendable – Patricia Sappor

President of the Chartered Institute of Bankers Ghana, Patricia Sappor has described the recapitalization directive of the Bank of Ghana (BoG) as a commendable one.

Patricia Sappor giving her reasons said the central bank with a capital adequacy ratio of 20 percent as at October 2020 has ensured that the banking sector has remained resilient, liquid,

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Speaking at the institute’s annual banking dinner on Saturday, November 29, Mrs Sappor said, “The Central Bank has made this well above the regulatory 13 percent prudential limit under the Basel II/ III framework and this is commendable.”

“We also commend the Central Bank and the Government for the timely intervention in putting in place monitoring mechanisms, policy measures and strategies when the COVID-19 pandemic broke out in Ghana. These measures, which included the reduction of the Primary Reserve Requirement from 10 percent to 8 percent and the holding of the policy rate at 14.5 percent, amongst others, helped to stimulate the economy and to a large extent has aided in stabilizing businesses and the industry,” Mrs Sappor added.

The Chartered Institute of Bankers, Ghana promotes the study of banking and regulates the practice of the banking profession in the country.

To ensure that banks operating in Ghana remained profitable, the Bank of Ghana in 2017 issued a directive for all banks and non-bank financial institutions to increase their equity capital.

This meant that the BoG revised the minimum paid-up capital for existing banks and new entrants from GH¢120 million to GH¢400 million while existing banks had until 31 December 2018 to comply with the new capital requirement.

The directive according to the central bank was part of a holistic plan to reform the financial sector towards developing, strengthening and modernizing the sector to support the government’s economic growth vision and transformation agenda.