{"id":417112,"date":"2017-09-11T15:16:33","date_gmt":"2017-09-11T15:16:33","guid":{"rendered":"https:\/\/ghana-mma.com\/2017\/09\/11\/bog-sets-conditions-for-meeting-new-capital-level\/"},"modified":"2017-09-11T15:16:33","modified_gmt":"2017-09-11T15:16:33","slug":"bog-sets-conditions-for-meeting-new-capital-level","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2017\/09\/11\/bog-sets-conditions-for-meeting-new-capital-level\/","title":{"rendered":"BOG sets conditions for meeting new capital level"},"content":{"rendered":"

<\/p>\n

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Bank of Ghana has outlined conditions for meeting the new capital level of GH\u20b5400 million. According to a public notice by the Central Bank and signed by its secretary, Caroline Otoo , banks must recapitalize through fresh capital injection ,\u00a0Income surplus among others. \u00a0\u00a0<\/p>\n

It however maintained that banks are not suppose to capitalize\u00a0revaluation reserves,\u00a0\u00a0reserves\u00a0\u00a0on financial instruments\u00a0\u00a0through other\u00a0\u00a0comprehensive\u00a0\u00a0\u00a0income, statutory\u00a0\u00a0reserves, credit risk reserves and unaudited profits.<\/p>\n

The Bank of Ghana\u00a0\u00a0also adds that all exiting banks must maintain\u00a0\u00a0a minimum unimpaired paid up capital\u00a0\u00a0as per section 28(1) and (3) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930)<\/p>\n

<\/p>\n

Read the full Bank of Ghana notice below:<\/b><\/p>\n

The Bank of Ghana announces a new minimum capital requirement, as part of a holistic financial sector reform plan to further develop, strengthen, and modernize the financial sector to support the government\u2019s economic vision and transformational agenda.\u00a0\u00a0<\/span><\/p>\n

As a first step, the Bank revoked the licenses of two insolvent banks to ring-fence a potential spillover threat to the rest of the financial sector and also to prepare the grounds for other reforms. <\/span><\/p>\n

At the same time, the Bank of Ghana has agreed with identified banks, a roadmap for recapitalization in accordance with the capital restoration plans stipulated by the Bank and Specialised Deposit Institutions Act, 2016 (Act 930).\u00a0<\/span><\/p>\n

Looking ahead, banks would require a more sophisticated and robust capital framework, adequate to transform the banking sector and consistent with the growing risks, levels of sophistication and exposure banks are currently facing.\u00a0<\/span><\/p>\n

\u00a0In line with the above, and in accordance with Section 28 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana announces for the information of Banks and the general public that it has revised upward the minimum paid up capital for existing banks and new entrants from GH\u00a2120,000,000.00(One Hundred and Twenty Million Ghana Cedis) to a new level of GH\u00a2400,000,000.00 (Four Hundred Million Ghana Cedis) effective\u00a0<\/span>Monday, September 11, 2017\u00a0under the following conditions:\u00a0<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0 Banks are required to meet the minimum capital through<\/p>\n

A)\u00a0\u00a0\u00a0 Fresh capital injection.<\/p>\n

B)\u00a0\u00a0\u00a0 Capitalisation of income surplus.<\/p>\n

C)\u00a0\u00a0 A combination of fresh capital injection and capitalization of income surplus.<\/p>\n

    \n
  1. Banks are not allowed to capitalize revaluation reserves, reserves on financial instruments through other comprehensive income, statutory reserves, credit risk reserves and unaudited profit.<\/li>\n
  2. All existing banks have up to 31st<\/sup> December, 2018 to meet the new minimum paid up capital requirement under the criteria indicated below;<\/li>\n<\/ol>\n
      \n
    1. Maintain a minimum unimpaired paid up capital s per Section 28(1) and (3) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) of GH \u20b5\u00a0400,000,000.00 by end December 2018.<\/li>\n
    2. In computing impairment of paid up capital, all banks are reminded that, in addition to the provisions in section 28(3) of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act930), losses shall not be set off against credit risk reserve and unaudited profit.<\/li>\n
    3. All banks which currently have been granted \u201cApproval in Principle\u201d shall comply with the new minimum capital levels by end December 2018.<\/li>\n
    4. All pending applications for banking licence i.e. without \u201cApproval in Principle\u201d are required to meet the new minimum capital requirement of GH \u20b5\u00a0400,000,000.00 and the feasibility reports accompanying such applications should be amended.<\/li>\n<\/ol>\n
        \n
      1. Non-compliance with the new minimum paid up capital requirement shall be dealt with in accordance with section 33 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).<\/li>\n<\/ol>\n

        All banks and prospective applicants for banking licence should take note and be guided accordingly.<\/p>\n

        CAROLINE OTOO (MRS)<\/b><\/p>\n

        THE SECRETARY<\/b><\/p>\n<\/div>\n

        \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\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

        Bank of Ghana has outlined conditions for meeting the new capital level of GH\u20b5400 million. According to a public notice by the Central Bank and signed by its secretary, Caroline Otoo , banks must recapitalize through fresh capital injection ,\u00a0Income surplus among others. \u00a0\u00a0 It however maintained that banks are not suppose to capitalize\u00a0revaluation reserves,\u00a0\u00a0reserves\u00a0\u00a0on […]<\/p>\n","protected":false},"author":0,"featured_media":417113,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-417112","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\nBOG sets conditions for meeting new capital level - 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\/11\/bog-sets-conditions-for-meeting-new-capital-level\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"BOG sets conditions for meeting new capital level - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Bank of Ghana has outlined conditions for meeting the new capital level of GH\u20b5400 million. 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