Some financial observers have lauded moves by the Bank of Ghana(BoG) to bar foreign banks from occupying the Managing Director position and Board Chair position concurrently with foreigners.
The Second Deputy Governor of the Bank of Ghana, Dr. Johnson Asiama speaking at forum in Accra announced that the central bank will soon come out with a new rule that will prevent foreign banks from concurrently occupying the Managing Director position and the Board Chair position.
Explaining the importance of the new rule to Citi Business News, banking Consultant, Nana Otuo Acheampong stated that the law will compel foreign banks to fill one of the positions with a Ghanaian to enhance transparency.
According to him, the process is part of a broader move by the central l bank to monitor activities of all commercial banks in the country.
“If you are foreign bank and say you have located here, then we are asking you to at least make one of the two top positions local, that is either the CEO is Ghanaian and then the Board Chairman is foreign, or vice versa,” he said.
“We are talking about the nationality of the two top positions in the bank. The two top positions are at the executive is the Chief Executive, and at the non-executive level the Board Chairman. So what we are saying is if you are a foreign bank reserve one for a Ghanaian,” he explained.
Other areas of the new BoG rules
Touching on other areas of the new rules that is yet to be enforced, Nana Otuo Acheampong allayed fears the provision that will limit the tenure of MDs and CEOs in the banking industry to 15 years will take a retrospective effect.
Dr. Asiama in announcing aspects of the new rules disclosed that the new regulation will cap the tenure of office of bank MDs to a period of three terms per five years.
But Nana Otuo Acheampong explained that the regulation will not take a retrospective effect since the constitution of Ghana frowns on such laws.
According to him, the rule will take effect from the first day it is introduced since it cannot be used to make changes in the past.
“It will not take a retrospective effect so if anything at all it will be hence forth but not take the past into account,” he said.
“As at now it’s only CAL Bank MD who has done more than 15 years. The law will be respective but not retrospective” he stressed.
By: Lawrence Segbefia/citibusinessnews.com/Ghana