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The fate of 6 banks still in limbo as BoG stays deadline for banks recapitalisation

Due to the clock fast ticking for universal banks to recapitalise, the fate of six out of 28 is still in limbo.

As it stands now, there are no concrete signs that the six banks (names withheld) are succeeding in their frantic attempts to beat the deadline of December 31 this year, to raise their stated capital to GH¢400 million.

This means that should the deadline expire, the central bank will either be forced to downgrade them to savings and loans companies or will have their licences totally revoked.

The latter action, should it happen, is likely to worsen the already turbulent situation within the banking sector where depositors are engaging in panic withdrawals because of their lack of confidence and increasing uncertainty in the system.

Meanwhile, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, said at the last Monetary Policy Committee (MPC) news conference for the year in Accra on Monday, that the deadline for the bank recapitalisation would be stayed at December 31.

“Deadline for the bank recapitalisation is unchanged at end-year 2018,” he said.

This was despite concerns by some experts in the banking sector that should the deadline remain unchanged, many banks would be unable to recapitalise.

The BoG earlier indicated that 22 out of the existing 28 universal banks in the country had met the new capital requirement as of the end of September this year.

This means that the remaining six banks have barely five weeks to meet the new minimum paid-up capital requirement in line with the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

BoG monitoring

Dr Addison said the BoG was closely monitoring and working with the banks towards their recapitalisation efforts to ensure a formidable banking sector next year.

He said many banks were close to meeting the new minimum capital while a few more remained in merger talks. The governor, however, failed to disclose the exact number of banks which had met the requirement as of this month.

“We are happy to note that many banks are close to meeting the new minimum capital requirement and a few are concluding discussions on mergers.

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