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Government has stated that it’s considering various options to provide financial support to indigenous banks to meet the new minimum capital requirement of GH¢400 million by 31st December 2018.

The financial support, according to government, would be limited to indigenous banks that are solvent, well governed and managed and in full compliance with the regulatory requirements of the Bank of Ghana (BoG).

Additionally, government said it would continue to explore policy interventions to make the entire financial services sector more resilient and dynamic in order to promote and establish Ghana as a regional financial services centre.

A statement issued by the Finance Ministry, which made these known, said government supports BoG’s efforts at strengthening and cleaning up the banking sector, adding that such measures, coupled with the commitment to fiscal consolidation and macroeconomic stability, should help improve the availability of credit to the private sector and reduce lending rates.

Noting that the building of a sound banking sector by the Bank of Ghana (BoG) is key to supporting government’s efforts at transforming the country’s economy, the Finance Ministry disclosed that government is interested in ensuring that Ghana’s banking system is not only resilient and capable of driving the transformation agenda, but also supports the promotion and participation of strong indigenous Ghanaian banks.

“To this end, the government has incorporated a new bank called Consolidated Bank Ghana Limited (herein referred to as Consolidated Bank) and capitalized it with GH¢450 million.

“Consolidated Bank will assume selected assets and liabilities of these five banks whose licences have been revoked by the Bank of Ghana.”

It added that government has also provided financial support through the issuance of a bond in the amount of GH¢5.76 billion towards the Purchase and Assumption Agreement under which the Consolidated Bank Ghana Limited has acquired all deposits and other specified liabilities and good assets of the five banks.

“This financial intervention will mitigate the impact of the consolidation of the five banks on the banking system and the wider economy and ensure that all customer deposits are protected.

“Moreover, the consolidation of the five banks achieves the twin objectives of first promoting the safety, soundness, and stability of the financial system, as well as strengthening Ghana’s indigenous banks.

“The new Consolidated Bank, which will initially be 100% government owned, will be a more robust and better-managed bank which will ensure strong indigenous Ghanaian presence in the banking sector.”
Source: Daily Guide

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