BoG Warns Against Deposit Mobilisation Fees

The Bank of Ghana (BoG) has cautioned Banks and Specialized Deposit-taking Institutions (SDIs) in the country to desist from the payment of facilitation/business development fees or any other fees to mobilize deposits.

According to the Central Bank, the practice was detected during the recent clean up exercise in the banking industry, which concluded last December, adding that, the practice has the tendency to increase the ‘Cost of Funds’ of institutions.

The BoG, in a statement signed by its Secretary, Frances Van-Hein Sackey, stated: “We observed during the banking industry clean up exercise, a practice whereby facilitation/business development fees or some other payments are made to agents who assist in the mobilization of Wholesale Deposits, particularly from the public sector.”

The statement added that “It should be noted that any institution which fails to comply with this notice shall be severely sanctioned”.

BoG’s notice referred all banks and SDIs to Section 16 (1) (f) of the Banks and Specialised Deposit-Taking Act, 2016 (Act 930), which it said gave BoG the authority to revoke the licence of any institution which, in the judgment of the Bank of Ghana, amounted to unsafe or unsound banking practices.

“All Banks, SDIs and the general public are to take note of the above and be guided accordingly,” it concluded.