The Bank of Ghana(BoG) has served notice to all Rural/Community Banks and Microfinance Institutions that it will sanction institutions that fail to meet the minimum capital (GH₵1,000,000GH₵2,000,000) respectively by 28th February, 2020.

A statement issued by the Central Bank said:” Pursuant to Section 28(1) of the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930) and Section 11 of the Non-Bank Financial Institutions Act, 2008 (Act 774), Rural/Community Banks and Microfinance
Institutions which fail to comply with their respective minimum capital by
the above date shall be sanctioned.

Shareholders, Directors, Operators of Rural/Community Banks and Microfinance Institutions are to take note of the above and be guided accordingly, the release signed by BoG Secretary, Frances Van-Hein Sackey, said.

The Central Bank’s warning comes on the heels of the reinforcement of BoG’s banking sector clean up last Friday as it revoked the licenses of twenty-three savings and loans companies and finance house companies which it said were insolvent and could no longer meet the obligations of customers.

The Bank of Ghana also appointed Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.

According to a statement from BoG, “The revocation of the licences of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”

The statement added, “It is the Bank of Ghana’s assessment that these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors.”

These actions were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.”

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