The Central Bank increased the minimum capital requirement for banks from 120 to 400 million Ghana cedis to enhance the financial position of banks.

But what are the possible options available to banks that have not yet met the requirement?

Jessica Ayorkor Aryee and Lawrence Segbefia have been speaking to some industry watchers who believe mergers may be inevitable eventually.

Click to listen to full audio report

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By: Lawrence Segbefia & Jessica Ayorkor Aryee/citibusinessnews.com/Ghana

The post Banks’ positions on meeting new capital requirement (Audio) appeared first on Citi 97.3 FM - Relevant Radio. Always.

This comes after the bank secured various investments, with the most recent being an investment with Advanced Finance and Investment Group (AFIG).

The Governor of the Bank of Ghana, Dr Ernest Addison in November 2017, disclosed that five banks had so far met the minimum capital requirement.

In an interview with Citi Business News, the Managing Director of First Atlantic bank, Mr. Odun Odunfa said, AFIG Funds’ investment in the bank will strengthen the bank’s capital needs and get it closer to meeting the minimum requirement.

“We are close to 200 million cedis at the moment we are going through a Rights to Issue right now with existing shareholders and aside that, we are talking to other investors. So we are very confident that by the second quarter, we should have raised the needed money for the minimum capital requirement.”

Mr Odunfa further highlighted the other investment agreements signed unto recently.

“We have a group of twelve investors, I believe nine are local investors and three are foreign. So we continue to be confident in raising the money, I mean AFIG coming in tells you that the investment community is happy with us, I mean they understand our story and they believe in what we are doing, it’s the first private equity investment in a bank in Ghana in a long time, that community itself is opening up very quickly to us. But with that said we have our plans with existing shareholders and other institutional investors who are interested”.

Mr Odun Odunfa made these comments at the sidelines of a signing ceremony between First Atlantic Bank and AFIG Funds.

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By: Anita Arthur/citibusinessnews.com/Ghana

The post First Atlantic Bank secures investment to increase capital appeared first on Citi 97.3 FM - Relevant Radio. Always.

This represents an increase of 233.3 percent from the previous 120 million cedis.

By this, banks in the country will be required to set aside 400 million cedis in capital to be supervised by the central bank.

The Governor of BoG, Dr Ernest Addison, announced the figure to Chief Executives of banks today, Friday, September 8, 2017.

Citi Business News has gathered that banks will be given until December 2018 to meet the new requirement.

Ghana’s banking sector recently suffered a setback after assets and deposits of UT Bank and Capital were takenover by GCB Bank.

The takeover confirmed reports of some 8 banks which were under distress.

Some financial observers have called for an increase in the capital requirement to force banks to merge.

Currently, there are about 31 banks in the country; a number some observers say is too high for Ghana’s economy.

The last time the central bank increased the capital requirement of banks was in 2012 when it was increased from 60 million cedis to 120 million cedis.

At the time new banks were required to meet the new figure while existing banks were given some period to meet it.

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By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post BoG increases capital requirement of banks to GH¢400m appeared first on Citi 97.3 FM - Relevant Radio. Always.