BOG Publishes Update on Status of Banking Sector Reforms in Ghana
BOG published an update on the status of banking sector reforms in Ghana. Following the recapitalization exercise that ended on December 31, 2018, there are now twenty three universal banks operating in Ghana.
Ghana is undergoing strengthening of the regulatory and supervisory framework and the just-ended recapitalization exercise has re-positioned the banking sector as better capitalized, liquid, stronger, and more resilient. Sixteen banks (mentioned in the update) have met the new minimum paid-up capital requirement of GHC 400 million mainly retained income and fresh capital injection. Bank of Ghana approved a request for a voluntary winding up of the operations of Bank of Baroda (Ghana) Limited, effective from December 31, 2018. Bank of Baroda's winding up is the result of the Government of India's decision to rationalize the overseas operations of branches/subsidiaries of Indian public sector banks.
Pursuant to Section 123 of the Banks and Specialized-Deposit-Taking Institutions Act, 2016, BOG has revoked the banking licenses of Premium Bank Limited and Heritage Bank Limited. Premium bank had continuously breached the capital adequacy ratio (CAR) requirement since December 20178. Efforts to correct the capital inadequacy did not work and the bank reported a CAR of negative 125.26% with a capital deficit of GHC 528.33 million, implying that the bank is insolvent. Investigation revealed that the bank obtained its banking license through the use of suspicious and non-existent capital. Furthermore, the prudential returns submitted to the Bank of Ghana wee inaccurate. In addition, Heritage Bank Limited lost its license because its capital appears to have come from suspicious sources and it failed to meet the GHC 400 million capital required as of December 31, 2018, among other issues.
Related Links
Keywords: Middle East and Africa, Ghana, Banking, Capital Adequacy, Recapitalization Exercise, Bank Licenses, Banking Reforms, BOG
Previous Article
EIOPA Publishes Work Program for 2019Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.