The Bank of Ghana (BoG) has stated that it is not processing any application for a fresh banking licence to new entrants into the banking sector.
The Governor of the BoG, Dr Ernest Addison, who stated this, was content that the banking sector reforms that cut the number of banks from 33 to 23 had made the banking sector more resilient to shocks.
Speaking to the Daily Graphic in Accra, he said the central bank had not received any fresh applications for new banking licences in the last few months.
He was confident that the few banks that currently operated in the country remained “well-capitalised, solvent, liquid, efficient and profitable, with improved financial soundness indicators”.
There had been concerns in some circles that the central bank was processing fresh applications for banking licences two years after the financial sector clean-up.
But Dr Addison said: “We have a framework that we are working with. It is an open and liberal financial sector and if you meet the minimum capital of GH¢400 million, we will license you.”
‘Fewer the merrier’
At a Monetary Policy Committee news conference last Friday, Dr Addison, who had given an update of the banking sector reforms, had said the financial sector was strong and liquid, even with just 23 banks, suggesting that “the fewer, the merrier”.
“At the start of the reforms in August 2017, total assets were GH¢89.1 billion for a sector that had [36] banks, and two years after the reform process started, total assets had increased to GH¢115.2 billion as of the end of August 2019, even with 23 banks.
“In the same direction, total deposits have improved from GH¢55.7 billion to GH¢76.0 billion over the same comparative period, reflecting a stronger deposit base owing to more trust and confidence in the banking sector, with fewer but stronger banks,” he said.
Dr Addison said there had been a marked improvement in banks’ performance, which reflected a positive impact of the recent reforms.
Source: Graphic online
