BoG’s GH¢400m Minimum Capital Requirement Unnecessary, Arbitrary – Forson
The Minority spokesperson on Finance Cassiel Ato Forson has described as needless the Bank of Ghana’s (BoG) hiking of the minimum capital requirement from GHC120million to GH¢400million.
“In the first place the call to introduce a minimum capital of GH¢400million is unnecessary, it is unreasonable and it is arbitrary,” the former deputy Finance Minister stated in an exclusive interview with Starr News’ parliamentary correspondent Ibrahim Alhasssan Tuesday at the sidelines of a press conference to react to a newspaper allegations that former government appointees took double salaries while in office.
The central bank last year raised the minimum capital requirement to GH¢400 million, equivalent to about US$100 million and commercial banks in the country have up to December 2018 to raise the amount, which represents a 333.3 per cent increase from the current minimum capital.
Banks were last recapitalized in 2012, when the BoG asked them to raise their stated capital from GH¢60 million at the time to the current GH¢120 million.
That round of recapitalization led to the consolidation of three banks, The Trust Bank (into Ecobank), Intercontinental Bank (into Access Bank) and Amalgamated Bank (into Bank of Africa).
Explaining why the recent increment in the minimum capital was foolhardy, he told Alhassan that the erstwhile Mahama administration which was booted out of power commissioned a research into a possible adjustment of the capital requirement and per the research, the banks can only afford GH¢213million.
As a member of the Central Bank, the GH¢213million was approved “only for us to exit [and] this government comes in [and] based on somebody’s thinking that the banks should come together without any scientific analysis and concluded that minimum capital requirement should be increased to four hundred million Ghana cedis…approximately three hundred percent increase”.
“That does not make sense…because it was not backed by any scientific analysis,” he stated warning that the move will lead to ceding Ghana’s universal bank structure to foreigners which would be detrimental to the economy as the foreign bank “are not interested in the SMEs, not interested in funding government business.”
The Press conference
At the Tuesday’s presser the Minority in Parliament served notice it will sue the Criminal Investigation Department of the Ghana Police and some newspapers following allegations that former government appointees took double salaries while in office.
The Minority believes the government is resorting to intimidating tactics on its members to prevent them from criticizing the Akufo-Addo administration.
“Last week, twenty-five of us received strange letters and phone calls from the Criminal Investigations Department (CID) of the Ghana Police Service inviting us to confer with Mrs. M.Y.T. Addo-Danquah, Deputy Commissioner of Police and to assist in investigations of allegations of double salaries made against us by Government.
“In a bizarre twist, as we were readying to appear before the CID this week beginning from yesterday considering that we had been grouped to appear on separate days, the CID called some of our colleagues to inform them that they were no longer required to appear as they had made mistakes with 18 of the 25 Minority MPs originally contacted,” Minority spokesperson for Finance Cassiel Ato Forson addressed the media on Tuesday.