The Bank of Ghana (BoG) has advised local banks operating in the country to consider mergers, inter-bank acquisitions or enlistment on the stock market as ways of raising enough capital to meet the BoG’s capital base requirement of GH¢60 million.
A Deputy Governor of the Bank, Mr. Millson K. Narh, who gave the advice at the launch of the 10th anniversary of UniBank Ghana, an indigenous bank said: “Domestic banks may have to consider all available options of raising the GH¢60 million minimum capital requirement including mergers, acquisition or consolidate their positions by raising capital from the stock market.”
That, according to him, was necessary to enhance local competitiveness and further create a level playing field for all banks within the country’s financial sector.
Mr Narh said though the higher minimum capital base provides some support for the risk absorption, the main challenge was that “banks may be pushed to search for higher returns for shareholders.”
He observed that the move “may subsequently lead to the financing of the sub-optimal projects or even speculative activities and relaxed credit standards.”
Source: Daily Graphic