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The Bank of Ghana is seeking more powers under Foreign Exchange Act 2006, (Act 723), to enable it to impose stiffer sanctions on banks and forex bureau operators that flout the law with impunity. The Central Bank is of the view that instead of merely suspending recalcitrant players in the industry as per the present Act, there should be a situation where it can be allowed to completely ban offenders to help check the growing indiscipline within the market. The move by the central bank is said to be a response to the blatant disregard for the Act by players in the industry, who find their dubious deals more profitable than the fines imposed on them by the Bank of Ghana. At the recent Monetary Policy Committee (MPC) meeting, the Governor of the BoG, Dr Henry Kofi Wampah, explained that the quest by the central bank to seek more powers was to help inject sanity into the foreign exchange market while ensuring that players in the sector did not take advantage of the loose nature of the present Act to short-change customers. Consequently, the Governor said the BoG was collaborating with the Ministry of Finance and Economic Planning (MoFEP) to review the Act and bring it up to speed with current developments in the market. Sources within the BoG later told the GRAPHIC BUSINESS that instead of serving as a deterrent, the current act was virtually encouraging indiscipline in the foreign exchange market, given that most of the banks did not mind flouting the act and getting the punishment because of the lenient nature of such penalties. �With the current act, some of the banks can look at the gains they will make if they commit a particular offence vis-a-vis the returns and if they realise that those gains far outweigh the punishment, then they go ahead to commit it,� one of the sources said. There are also reports that the banks are forced to engage in all manner of illegal practices in an attemtpt to survive the turblulent competition within the sector. Foreign Exchange Act and Penalties The current law governing the operations of banks in the foreign exchange market was passed in December 2006. The Act gave the BoG the power to license, regulate and supervise all operations pertaining to foreign currency, international payment transactions and foreign exchange transfers within, into and out of the country. Under the Act, the Central Bank only has the power to suspend an operator or revoke the licence if the bank has sufficient information that the actions of such an institution contravene the demands of the act. Under general penalty, the said offences not captured in the act could attract a fine of not more than 500 penalty units - the equivalent of GHc 6,000 � or a term of imprisonment of not more than four years or both. The BoG, however, sees these are very lenient; hence, the move to get the act reviewed. Bankers Association reacts Meanwhile, the Ghana Association of Bankers (GAB), which is the umbrella body of banks in the country, has said that the BoG would have to justify its request for more powers in the proposed review of the Act. �If they think they ought to review the Act to get more powers, then they will have to justify it,� the Executive Secretary of the GAB, Mr D.K. Mensah, told the GRAPHIC BUSINESS in an interview. That justification, he said was necessary given that most banks were being punished virtually on a daily basis based on the remits of the BoG�s powers under the current Act. �So if the bank wants more powers to go beyond what it already has, then it must be justified,� he said. Mr Mensah added that the central bank had already met with the association to discuss the intended review of the act. He said the association and its members had some operational challenges with the foreign exchange Act which should be factored into the review, Mr Mensah GAB said but would not disclose any further details. Additional measures In addition to seeking a review of the foreign exchange Act, the BoG Governor said the bank would soon introduce a new set of foreign exchange regulations and code of conduct to guide operations within the market. Such actions, he said, were part of the bank�s quest to ensure greater control of the banks in the industry and create stability while protecting the general public. Dr Wampah mentioned the variation in the quotations of the cedi against its foreign counterparts as one anomaly that the new code of conduct and regulations for the sector would help address. The new set of regulations, he added, would be launched in the first week of January, next year, and subsequently take immediate effect.