Dr Henry Wampah, BoG Governor
Dr Henry Wampah, BoG Governor

This includes the strengthening of the legal framework for supervising and regulating the financial system in the country.

Dr Henry Wampah, BoG Governor
Dr Henry Wampah, BoG Governor

According to the central bank, the formulation of the new Banks and Specialized Deposit-Taking Institutions Bill and the Ghana Deposit Protection Bill are part of the measures been put in place to ensure strong and stable financial system.

The regulator said these bills have been submitted to Parliament and once approved, the BoG will develop regulations needed to fully implement these laws by June 2016, with assistance from the long-term IMF advisor.

This is part of a memorandum update submitted by the Government of Ghana, during the second review of the performance of Ghana’s economy by the International Monetary Fund.

“A special diagnostic external audit of commercial banks to review asset classification and valuation, provisioning and loan restructuring practices, according to both the BoG prudential requirements as well as International Financial Reporting Standards (IFRS), was completed in September (end-September 2015 SB) and a final report was due by the end of December,” according to the memorandum.

It noted that in parallel, the BoG has evaluated non-performing government guaranteed/quasi-fiscal exposures and their effect on banks’ loan books. “The preliminary results indicate some differences in the interpretation of the guidelines relating to impairments,” it added.

After reviewing these discrepancies with the banks, the BoG said it will take action to remedy under-provisioning and require banks to increase capital, if necessary, in line with a timeline, which will be agreed with the banks.

“The BoG will also issue a guideline to consolidate earlier directives issued on the IFRS as well as give a position clarifying grey areas of the standard. Areas of the prudential norms, which are not too clear are also being reviewed,” the statement noted.
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The memorandum said the BoG has been collaborating with AFRITAC WEST 2 to build capacity for implementing Basel II/III and a long term advisor (from the Fund) commenced duty in October last year to assist the Bank on banking supervision.

The BoG has also requested Fund staff to conduct a Financial Sector Assessment Program in 2017.

Source: Fred Yaw Sarpong- Daily Express

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