{"id":414237,"date":"2017-09-04T06:29:58","date_gmt":"2017-09-04T06:29:58","guid":{"rendered":"https:\/\/ghana-mma.com\/2017\/09\/04\/banks-have-one-year-ultimatum-to-recapitalise-finance-minister\/"},"modified":"2017-09-04T06:29:58","modified_gmt":"2017-09-04T06:29:58","slug":"banks-have-one-year-ultimatum-to-recapitalise-finance-minister","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2017\/09\/04\/banks-have-one-year-ultimatum-to-recapitalise-finance-minister\/","title":{"rendered":"Banks have one year ultimatum to recapitalise \u2013 Finance Minister"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Finance Minister Ken Ofori-Atta has indicated that banks would be given up to a year to meet the new minimum capital requirement when the recapitalisation announcement is made.<\/p>\n<p>The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, recently indicated that the pronouncement by the regulator could be made in the first week of September.<\/p>\n<p>Commercial banks in the country require GHC120 million as minimum capital before they can operate in the country.<\/p>\n<p><!-- \/1002554\/Myjoyonline.com_InArticle_300x250 --><\/p>\n<p>According to the Finance Minister \u201cthe increment would be significant and similar to what happened in Nigeria which forced a lot of banks in the country to merge\u201d.<b>\u00a0<\/b><\/p>\n<p>Mr Ofori-Atta, however, said\u00a0government will be willing to help the local banks to recapitalize especially those it holds significant shares in them.<\/p>\n<p><b>Possible scenarios\u00a0\u00a0\u00a0<\/b><\/p>\n<p>The Finance Minister has stated that the Bank of Ghana is yet to settle on the capital levels, some few days to the planned announcement.<\/p>\n<p>It is not clear what the likely capital levels\u00a0the Central Bank would work with as\u00a0JOYBUSINESS understands there are some scenarios being considered.\u00a0\u00a0<\/p>\n<p><b>Scenario one<\/b><\/p>\n<p>If BoG\u00a0decides to use the new capital levels to push out the supposed \u201cweak banks\u201d, encourage some mergers and\u00a0support\u00a0others to undertake big transactions, then\u00a0the\u00a0regulator may look at GHC400 million and above or \u00a0GHC520 million.<\/p>\n<p><b>Scenario two<\/b><\/p>\n<p>If the Central Bank wants to manage the situation or \u201cabsorb loses\u201d then the regulator could settle on GHC255 million or up it to\u00a0GHC350 million.<\/p>\n<p>According to sources, the\u00a0banks could be asked to turn to their shareholders for fresh capital injection in meeting the new levels or capitalization through income surplus or a combination.<\/p>\n<p><b>\u00a0Preparedness of banks\u00a0\u00a0<\/b><\/p>\n<p>A look at the financial statements of the commercial banks as at December 2016 showed that if the capital is increased from GHC120 million to GHC350 million today, about 14 banks may\u00a0be able to meet capital in a year.<\/p>\n<p>If the capital is increased to GHC520 million, then maybe only 8 out of the 36 could still have their license to operate in the country.<\/p>\n<p><b>Reactions\u00a0\u00a0<\/b><\/p>\n<p>Some of the local banks told JOYBUSINESS that they can meet the new levels even if the Bank of Ghana settles on even more than GHC500 million.\u00a0<\/p>\n<p>Business mogul and founder of GN Bank, Dr. Paa Kwasi Nduom told JOYBUSINESS the Bank can meet any capital level that is agreed upon\u00a0or announced by the Central Bank.<\/p>\n<p>Dr. Nduom is,\u00a0however, worried about the approach of \u201cone size fits all\u201d stressing there should be special arrangement for local banks to recapitalize. He believes\u00a0not all banks wants to be big\u00a0or undertake bigger transactions.\u00a0<\/p>\n<p>The Deputy Managing Director of Heritage Bank, Peter Sangber Dery, another local bank, also told JOYBUSINESS they can meet the proposed capital requirement, whatever levels the regulator agrees upon.\u00a0\u00a0\u00a0<\/p>\n<p>\u00a0<\/p>\n<\/div>\n<p>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a style=\"display:none\" rel=\"follow\" href=\"http:\/\/megatheme.ir\/\" title=\"\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633\">\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Finance Minister Ken Ofori-Atta has indicated that banks would be given up to a year to meet the new minimum capital requirement when the recapitalisation announcement is made. The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, recently indicated that the pronouncement by the regulator could be made in the first week of [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":414238,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-414237","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Banks have one year ultimatum to recapitalise \u2013 Finance Minister - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2017\/09\/04\/banks-have-one-year-ultimatum-to-recapitalise-finance-minister\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Banks have one year ultimatum to recapitalise \u2013 Finance Minister - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Finance Minister Ken Ofori-Atta has indicated that banks would be given up to a year to meet the new minimum capital requirement when the recapitalisation announcement is made. 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