Featured Product

    BOG Issues Guidance for Banks on Capital Utilization During COVID-19

    March 20, 2020

    BOG published guidance on the utilization of capital and liquidity releases to banks and specialized deposit-taking institutions, in light of the COVID-19 crisis. Banks and specialized deposit taking institutions are expected to refrain from declaring and paying dividends or making other distributions to shareholders for the financial year 2019, unless BOG is satisfied that the institution meets the regular prudential requirements and is not relying on the additional liquidity released by the policy measures to pay shareholders. All banks and specialized deposit-taking institutions shall, therefore, seek prior approval from BOG before the declaration and payment of dividends.

    Banks and specialized deposit-taking institutions should also desist from utilizing the released liquidity based on policy interventions, to purchase the securities of Government of Ghana and BOG. BOG shall monitor weekly the financial dealings of banks and specialized deposit taking institutions, to ensure full compliance with the directives. BOG has put in place this monitoring mechanism to ensure that policy measures introduced by BOG are effective in achieving their stated policy objective. Certain policy measures were introduced to enable banks and specialized deposit-taking institutions to provide more liquidity and financial support to critical sectors of the economy to mitigate the adverse impact of COVID-19 on the Ghanaian economy. The policy measures included:

    • Reduction of the Primary Reserve Requirement from 10% to 8% to provide more liquidity to support critical sectors of the economy
    • Reduction of the capital conservation buffer for banks from 3.0% to 1.5% to provide the needed financial support to the economy
    • Reduction of provisions for loans in the “Other Loans Especially Mentioned” category from 10% to 5% for all banks and specialized deposit-taking institutions as a policy response to loans that may experience difficulty in repayments due to slowdown in economic activity
    • Loan repayments that are past due for micro-finance institutions for up to 30 days to be considered as “Current,” as is the case for all other specialized deposit-taking institutions

     

    Related Link: Guidance

     

    Keywords: Middle East and Africa, Ghana, Banking, COVID-19, Dividend Distribution, Regulatory Capital, Credit Risk, CCB, Liquidity Risk, BOG

    Featured Experts
    Related Articles
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    News

    ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic

    ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.

    September 21, 2020 WebPage Regulatory News
    News

    ESAs Launch Survey on Templates for Product Disclosures Under SFDR

    ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).

    September 21, 2020 WebPage Regulatory News
    News

    ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks

    ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.

    September 21, 2020 WebPage Regulatory News
    News

    EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules

    EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).

    September 21, 2020 WebPage Regulatory News
    News

    EBA to Phase Out Guidelines on Loan Repayment Moratoria

    EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.

    September 21, 2020 WebPage Regulatory News
    News

    EBA Provides Opinion on Definition of Credit Institution in CRR

    EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).

    September 18, 2020 WebPage Regulatory News
    News

    ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks

    ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.

    September 18, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5820