A Canadian-based credit consultant, Emmanuel Akron, has advised banks in the country to see the Bank of Ghana’s new minimum capital requirement as an advantage to be proactive in managing their credit risk while eliminating waste.
There are fears some local banks in the country are likely to miss the BoG’s timeline on the new minimum capital requirement which has been increased from GHS120million to GHS400million.
The Central Bank has given banks until December 2018, to meet the new minimum capital requirement, with those unable to meet the deadline facing possible repercussions which include the loss of their banking license.
Business mogul, Dr Papa Kwesi Ndoum, has said that although his GN Bank can meet the requirement, the new capital requirement would see many indigenous banks being taken over by foreign banks if unable to meet the deadline, thus crippling the local economy in the long run.
But speaking on Class FM Thursday, 14 September 2017 Mr Akrong said banks should take advantage of the new requirement to put in place credit risk management plan.
“My advice to banks is that they should see this capital adequacy increase as an opportunity to increase their credit risk management. They should not undertake excessive risk with the view to improve returns as it may adversely affect them. Banks must continue to keep an eye on their expenses, be disciplined and eliminate waste and banks must be proactive in managing their capital,” he stated.
He added: “This shouldn’t have happened that 32 banks can’t meet GHS400 million. They knew years ago that the Bank of Ghana was planning this. If I read back two years ago, figures that was in the market were between GHS200 and GHS800million so if you were doing proactive planning two years ago, I think banks would have been in better shape now. I think most of them did wait and see and I think that is what is [surprising them]. This is a wakeup call.”
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