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RADP / Pulse Ghana  >  news  >  business

Bank of Ghana reviews minimum capital

Magdalene Teiko Larnyoh

Some financial experts argue that the increment in minimum capital is partly due to the increased number of banks even though the country’s has a relatively small population.

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According Accra-based Citi FM, the commercial banks in Ghana would have to increase their minimum capital for operation to at least 200 million cedis.

This represents close to a hundred percent increase in the current minimum capital requirement of 120 million cedis.

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Some financial experts argue that the increment is partly due to the increased number of banks even though the country’s has a relatively small population.

However, they argued that the upward revision should result in mergers and allow the banks undertake huge capital intensive deals.

The Managing Director of Zenith Bank, Henry Oroh told Accra-based Citi FM that the projected 260 million cedis should also deepen the financial sector.

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“The regulator has put forward about 260 million cedis. I think the minimum capital resetting was done deliberately by the government and the central bank to create bigger banks in the economy. We have a lot of banks that have very little capital and when your capital is very little, there is very little that you can do and when there are shocks, you’ll have some problems.”

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In a related development, the Managing Director of CAL Bank, Frank Adu Junior also said a minimum capital requirement of at least GHC 200 million to ensure banks meet huge financial commitments.

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“We need the strength and financial muscle to do the business of this country…if Goldfields, Golden Star, etc can raise about 1.3 billion to invest in a gold mine, don’t you think we could have private sector banks and companies taking up contracts to build harbours and runways?”

“Why shouldn’t we encourage the private sector to undertake these and take the burden off the government?” he further queried.

Magdalene Teiko Larnyoh Magdalene Teiko Larnyoh A feminist at heart and a lover of art. She loves to write on business, politics and health.

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