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Capping Don't restrict the number of Banks in Ghana - Finance Minister

Deputy Finance Minister designate has raised concerns about the need for industry players in the financial sector not to limit the number of banks in the country.

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play Deputy Finance Minister designate Charles Adu Boahen

Deputy Finance Minister designate Charles Adu Boahen has cautioned stakeholders in the banking sector against reducing the number banks in the country. 

Calls for a cap on the number of banks in the country have increased following the rising number of banks in the country.

There has been several complaints for a limit in the number of banks the country has.  By the end of this year, the about 35 banks operating in the country is expected to increase.

READ ALSO:Interest rates will be lowered if government cuts its expenditure- Financial Analyst

Comparing the statistics of the number of banks of some African countries to Ghana’s, the country’s number of banks is high.

Industry players say, although countries like Nigeria has a huge population it has about 26 banks, and South Africa has only seven banks yet with a population of more than 55million people.

But during vetting in parliament, the Deputy Finance Minister designate Charles Adu Boahen stated that capping the number will go against.

He believes that Ghana’s free market system would be injured if capping is allowed.

READ ALSO: Agricultural sector can contribute more to Ghana's GDP -Banking expert

“I don’t believe that you should restrict the number of required to open a bank. I think that you will be restricting free market if we did that”.

Mr. Adu Boahen explains that as far as owners of banks meet the criteria, restricting them from establishing their banks is both unfair and unnecessary. 

He is however suggesting that requirements for banks establishment should rather be reviewed.

“So you can have a bank that will set up and meet the capitalization requirement and have maybe five branches and say they are a universal bank. If you do that there is no way you are going to deepen financial intermediation and get your branches all over the country.”

The Deputy Finance Minister designate further appealed to the Bank of Ghana to ensure banks open up their networks to various parts.

READ ALSO:HFC Bank wins most successful Change Management Award

“So I think that as part of the requirements if I was the Governor of the bank of Ghana [which I’m not] would be to have a nationwide branch network as one of the requirements where every city or town that has a certain population would be required to have a branch to qualify to be a universal bank.”

Meanwhile financial Analyst Sam Bediako-Asante says the Bank of Ghana must take measures to cap the number of banks through compelling policies.

“There should be consolidation, mergers and acquisition to decrease the number of banks to about 15. He believes that bigger banks that can help our business community”.

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