The Bank of Ghana (BoG)is tightening its regulatory grip on financial institutions flouting the foreign exchange laws, warning that continued non-compliance could result in the revocation of remittance licenses.
In a statement issued today, July 29, the Central Bank was concerned about continued breaches despite repeated cautions and regulatory reminders.
It particularly cited Banks, Dedicated Electronic Money Issuers (DEMIs), Enhanced Payment Service Providers (EPSPs), and Money Transfer Operators (MTOs) over persistent violations of the Foreign Exchange Act, 2006 and the Updated Guidelines for Inward Remittance Services.
The offences include the use of unapproved channels for terminating inward remittances, unauthorised foreign exchange swaps, remittance settlements conducted without prior approval and the application of unofficial exchange rates.
BoG cautioned that institutions found flouting the rules risk other severe sanctions, including the termination of partnerships with non-compliant MTOs and the potential revocation of remittance licenses.
“The Bank will sanction any violating institution and terminate the remittance partnerships of all MTOs whose operations are not in compliance with the approved guidelines”, it cautioned.
It therefore asked the financial institutions to strictly adhere to the following guidelines:
i. The funding of the Local Settlement Account should be strictly done in accordance with section 7.1 (c) of the Updated Guidelines for Inward Remittance Services by Payment Service Providers.
ii. Ensure that all disbursements shall be from the Local Settlement Account as stated in section 7.2 (a) of the Updated Guidelines for Inward Remittance Services by Payment Service Providers.
iii. DEMIs/EPSPs should ensure that pre-funding arrangement with the Settlement Bank shall be done in accordance with section 7.2 (b) of the Updated Guidelines for Inward Remittance Services by Payment Service Providers.
The Bank of Ghana (BoG) has also issued a directive requiring all banks, Dedicated Electronic Money Issuers (DEMIs), and Enhanced Payment Service Providers (EPSPs) to submit detailed weekly reports on inward remittance transactions.