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Tuesday, October 4, 2022

Cut number of banks from 33 to 15- Analyts to BoG

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Some business and financial analysts have begun expressing worry over the growing number of banks in the country.

There are currently about 33 banks operating in the country with the number expected to increase as more financial institutions line up to receive licenses from the Bank of Ghana.

Proponents for a cap on the number of banks in the country have argued that despite Nigeria’s population of over 189 million people, the Central Bank of Nigeria has allowed only 26 banks to operate, while South Africa, which has a population of over 55 million people, operates about seven banks.

Banking Consultant Nana Otuo Acheampong has shot down the assertion calling for a free market system.

But Financial Analyst and Managing Director of Sam Bed Financial Consult, Mr. Sam Bediako-Asante is of the view that the Bank of Ghana must take measures to cap the number of banks through compelling policies.

“At the moment I think with the latest licensing I think they are about 33 banks, I am thinking that with this there should be consolidation, mergers and acquisition so that at most we can have just about 15 banks in Ghana , very big ones that can help our business community,” he said.

Giving some recommendations, Mr. Bediako-Asante stated that the central bank can increase the minimum capital to a level that will compel banks to merge.

According to him, such a measure will be one of the pragmatic ways the central bank can adopt to also allow the bigger takeover smaller ones that may not meet the requirement.

“First of all I think the Bank of Ghana should raise the minimum capital for all banks to not less than 400 million cedis and with this figure, I think majority of them wouldn’t even stand the capacity and therefore majority will be forced to merge, the very big ones will be encouraged to take over the smaller ones”.

By: Lawrence Segbefia/citibusinessnews.com/Ghana

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