THE Bank of Ghana has completed the first phase of the re-capitalisation of banks in the country to allow the banks to participate in the opportunities in the emerging oil industry.
The expectation is that the re-capitalisation process will build up adequate capital to match risk exposures and provide further stability to the financial system in the country.
Mr K. B. Amissah-Arthur, Governor of the Bank of Ghana, made this known at the annual dinner of the Chartered Institute of Bankers held in Accra last Saturday.
He, however, warned that additional capital could also contribute to instability if not managed efficiently and with integrity.
He explained that as bankers with additional resources sought adequate returns there was bound to be increasing vicious competition within the banking system.
He said that the competition would raise the possibility of banks engaging in extremely risky investments.
The Governor said that if governance structures and controls were not sufficiently robust, a crisis of significant impact could be created.
He said fortunately the Bank of Ghana (BoG) had put in place a regulatory framework to promptly identify emerging vulnerabilities in the financial system.
He said regulators in advanced countries were collaborating to avert future crises, and that banks in the country ought to develop initiatives to institute similar processes.
He urged banks in the country to build on the substantial progress already made to ensure that they played a greater role in the transformation of the Ghanaian economy.
Mr Amissah-Arthur urged banks to re-orient themselves to play a catalytic role as financial intermediaries in the economic development process.
He said to undertake that responsibility, banks ought to disclose their pricing and fees charged in the delivery of their services to the public, saying that his interaction with the banking public revealed that they were not happy with the cost of borrowing and that was the single most important concerns the public had against the banking system.
He explained that as the rate of inflation and treasury bill rates reduced it was expected that it would lead to lower lending rates.
The Governor said the Bank of Ghana would continue to publish the Annual Percentage Rates (APRs) to serve as a tool to promote transparency and competitive pricing in the provision of banking services.
The President of the Chartered Institute of Bankers, Mr Isaac Owusu-Hemeng, said the drilling of oil and the completion of the Bui Dam was bound to accelerate the nation’s industrialisation capacity and drive.
He said these developments, coupled with pragmatic forward looking macro-economic policies, were expected to change the economic and financial landscape of the country..
Mr Owusu-Hemeng said, however, that without a well- functioning financial system underpinned by a banking industry which is led by well trained, competent and honest bankers the newly found wealth would turn out to be an illusion as the benefits to the nation would not be realised.
New fellows and associates were inducted into the institute at the well attended annual dinner.
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