Market protectionism We will not stop issuance of permits to foreign banks- BOG

Indigenous Ghanaian banks are complaining of being choked out by foreign banks entering the country, and have petitioned the Bank of Ghana to put a freeze on the issuance of more permits.

  • Published:
play Governor, Bank of Ghana, Kofi Wampah
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The Bank of Ghana has rejected calls from the domestic players in the banking sector to suspend the issuance of banking permits.

Indigenous Ghanaian banks are complaining of being choked out by foreign banks entering the country, and have petitioned the Bank of Ghana to put a freeze on the issuance of more permits.

There are 29 banks in Ghana so far, and there are criticisms of the number being to big for  a market like Ghana's.

Meanwhile, Head of Banking Supervision at the Bank of Ghana, Franklyn Belnye says " Indeed we see a decline in the market share of domestic banks in the country, and it's a concern. But a freeze on issuance of incense is the way to go.

Mr. Belnye added that a freeze the issuance of licenses will also affect indigenous applications and not foreign applications only, which is why, according to him, it may not be a good idea. He further disclosed plans the Bank of Ghana had put in place to further strengthen indigenous banks.

" We recognized the difficulties of the individual indigenous banks, which is why we raised the capital requirements from GHC7 million to GHC60 million. This was to help them forge mergers and come together to be stronger entities instead of small individual banks. There's a lot they can do to come together. The requests for applications are not only coming from foreign banks, so it will not be prudent to freeze the issuance of permits."

There's a need for strong local banks, not many local banks. The focus must be on strength and not number."

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