Parliament passes Bank and Specialized Deposit bill

Parliament on Tuesday passed the Bank and Specialized Deposit-Taking Bill to improve financial regulations in the country.

It applies to banks, specialized deposit-taking institutions, financial holding companies and affiliates of banks.

The new bill follows the passage of the Deposit Protection Bill to protect the savings of depositors and also promote confidence in the financial system.

The bill highlighted the Bank of Ghana the sole regulator charged with financial regulations in the banking sector.

In addition, the bill also consolidated all laws covering the regulations of institutions involved in Deposit talking business.

A Member of the Finance Committee of Parliament, Benjamin Kpodo outlined the difference between the Depositors Protection Bill and the Bank and Specialized Deposit-Taking Bill.

He said:“one creates the insurance scheme-the other one seeks to regulate how they operate-licensing, reporting, their relationship with the Bank of Ghana.”

Kpodo also urged banks to cooperate with the new regulations.

Highlight of the Bill

Deals with restrictions on lending and investment- which prohibits a bank or specialized deposit-taking institution from granting advances,loans or credit facilities including guarantees against the security of the shares of the bank or specialized deposit-taking institution, the shares of its financial holding company, the shares of any of its subsidiaries or the shares of any of the subsidiaries of its financial holding company.
A bank, specialized deposit-taking institution or financial holding company whose capital adequacy ratio is less than the ratio prescribed by the BoG is not to take an inter-institutional placement or receive a loan or deposit from the any bank, specialized deposit-taking institution, or financial holding company in the country except with the express written approval of the Bank of Ghana.