KEYNOTE ADDRESS DELIVERED BY DR. H.

A KOFI
WAMPAH, GOVERNOR, BANK

OF GHANA AT THE

FOURTEENTH ANNUAL WORKING LUNCHEON OF THE

GHANA ASSOCIATION OF BANKERS ON WEDNESDAY,
JULY 16, 2014 AT LA PALM ROYAL BEACH HOTEL,
ACCRA.

Mr. Chairman,

Council Members,

Distinguished Guests,

Members of the Press,

Ladies and Gentlemen:

1. It is a pleasure to be back here at this years working

luncheon of the Ghana Association of Bankers and
stakeholders of the banking industry. I applaud the
Association for encouraging collaboration among industry
players for the past thirteen years and
commend

Council

Members

for

your

also like to
unflinching

dedication to work and your strong will and resolve to pull

your establishments through

in the face of current

macroeconomic challenges.
2. Mr. Chairman, in this speech, I will

present some

macroeconomic highlights and discuss the Banks vision

for the banking industry, highlighting opportunities and
challenges.
Macro-economic Developments
3. Mr. Chairman, recent macro-economic data by the Ghana
Statistical Service estimated the real GDP growth in the
first quarter of 2014 at 6.7 percent compared with 9
percent in same period last year.
4. Year-on-year Inflation reached 15.0 percent in June 2014
from 13.5 percent in December 2013. The upward
trajectory of inflation mostly reflects the pass-through of
adjustments in domestic petroleum prices, increased utility
tariffs and transportation costs, and cedi depreciation.
5. Pressures on the local currency still persist although there
is some moderation in the pace of depreciation on a
month-on-month basis. The pressures are major concern
due to the adverse sequences of the depreciating currency
on the economy. We, however,

anticipate that the

proceeds from the cocoa syndicated loan and from the

Eurobond issuance estimated at almost US$3bn would

provide significant support for the market in the second

half of the year. The onset of gas production in the fourth
quarter of the year would also reduce oil imports going
forward.
6. Mr. Chairman, the Monetary Policy Rate was raised by
100 basis points to 19 percent at the recent MPC meeting
was

meant

to

anchor

inflation

and

inflationary

expectations and to engender macro-economic stability in

the in the near term.
Highlights on Banking Sector developments
Ladies and Gentlemen, now let me present some banking
sector developments.
7. At end-May 2014, the banking and non-bank financial
institutions industry was made up of 1,051 institutions
comprising 27 class 1 banks, 57 non-bank financial
institutions (NBFIs), 139 rural/community banks, 435
licensed microfinance institutions, 388 forex bureaux, 3
credit reference bureaux and 2 representative offices of
foreign banks. The total number of bank branches as at
end-May 2014 was 892 and the average population per
branch, 28,027.
8. Despite such vast expansion of banking network and the
multiplicity

of

intermediaries,

bank

penetration

still

remains relatively low. In terms of geographical spread,

banking

operations

are

urban-based

and

highly

concentrated in the southern part of the country with

unbanked population ratio of over 80 percent. This means
that our effort to

reach the unbanked populace,

nonetheless, still remain a large untapped area for banks

to raise cheaper funds, through deposit mobilization.
9. In this regard, Mr. Chairman, permit me to enumerate
some of the key areas I envisage should engage the
attention of banks seeking opportunities for growth:
i.

Retail banking. Despite

some challenges facing the

economy, in my estimation, the growing middle class

offers a greater opportunity for a wide range of banking
menus to boost services delivery to the retail banking
sector.
ii.

Syndication. The booming oil sector has created a huge

financing lacuna, which I will encourage banks to
collaborate

through

syndication

to

provide

such

financing gap.
iii.

Mobile banking opportunities are gradually coming

of age. With access to internet on mobile handsets,
banks can collaborate with the Telecos and to benefit
from the high mobile density in the country and roll out

their products and services in order to reduce traffic

volumes at the banking halls.
iv.

The SME sector represent another important area for

profitability and growth and I am expecting banks to
revise and develop new banking solutions and models
to serve this market segment to engender financial
inclusion among the less privileged communities.

v.

The current depreciation of the cedi, while inimical to

import-driven businesses and on the flip-side supports
export-oriented companies which in my opinion lends
itself to profitable funding opportunities for banks to
foster economic growth.

On-going Reforms in the banking industry

10.

Against these

opportunities and the growing

challenges in the macro-economy, the Bank of Ghana has

initiated a number of key steps in line with its forward
looking view of the industry, which with your permission,
Mr. Chairman, I would like to highlight a few:
11.

After completing the December 2012 deadline for

compliance with the GH60.0 million regulatory capital for

banks, the Bank of Ghana in 2013 further revised upward
the

capital

requirements

for

new

entrants,

while

encouraging existing institutions to beef up their capital

position in this regard. Minimum paid-up capital for banks

has been revised to GH120.0 million.
12.

Similarly, the capital requirements for Non-Bank

Financial Institutions now stands at GH15.0 million, up

from GH7.0 million while the minimum capital for rural
banks has been pegged at GH300 thousand.
13.

The microfinance sector investors now require

GH500 thousand and GH300 thousand to obtain a Tier

II and Tier III microfinance company licence respectively.
However, in the very near future, the capital requirement
of banks would be assessed on the strength of their
Internal Capital Adequacy Assessment Process.
14.

Council Members,

the

mention

of

that

the

emerging microfinance sector and its ensuing challenges,

coupled with the general developments in the Ghanaian
banking and the NBFI sectors have warranted the
management of the Bank of Ghana to realign the
supervision functions to meet the risk and challenges in
the industry.

A new department has been created to

serve the supervisory needs of Rural and Community

Banks, Microfinance institutions and Forex bureaux.

Bank and SDI and the Deposit Protection Bills

15.

Another

important

emerging

landmark

worth

mentioning relates to the revision of the Banking Act,

2004 (Act 673) as amended by the Banking Amendment
Act 2007 (Act 738) and the development of a Deposit
Protection Bill. Inherent vulnerabilities and risks, coupled
with the learnt lessons of the global financial crisis calls for
a re-thinking of the legal and regulatory regime of our
industry. As I speak with you, a draft proposal of the Bank
and Specialised Deposit-Taking Institutions Bill has been
prepared and is undergoing review. The new bill attempts
to incorporate some of the missing links in the current Act
including, but not limited to, Consolidated Supervision,
reinforcement on Exposures of Connected Nature, Prompt
Corrective

Actions,

Islamic

Banking,

and

detailed

Resolution Framework.
16.

Mr. Chairman, the fallout from the global financial

crisis has aroused interest in the protection of consumers

of financial services. The Bank of Ghana is introducing a
Deposit Protection Scheme to consolidate its mission of
promoting confidence in the financial system especially in
relation to protecting the savings of all depositors, while
encouraging

financial inclusion and access to formal

financial services. To fulfill this mandate, a draft Deposit

Protection Bill has subsequently been finalized for onward
submission to Parliament for passage into law.
Onsite Examination
17.

It is worthy to note, Council Members, that the

overall outcome of the 2013, on-site visit to supervised

institutions was satisfactory and positive, showing general
improvements in financial positions and performance as
well as in their risk management framework. In spite of
these feats chalked, I must stress that we should not take
our eyes off the ball. Our vigilance has paid off, but we
must not be complacent. Let us continue to keep up the
good work, repeating with more dedication and resolve
what drove us there, and revising our models for
effectiveness in areas of weakness.
18.

Going forward the Bank of Ghana will continue its

efforts at improving the legal framework and regulatory

oversight activities in a bid to strengthen the safety,
stability and soundness of the financial system in Ghana.
The Bank of Ghana will continue its collaboration with
examiners from the Central Bank of Nigeria (CBN) to
conduct joint examination on Ghanaian incorporated
banks with Nigerian parentage under the framework of

the College of Supervisors of the West African Monetary

Zone.
Banking Regulations
19.

The Bank of Ghana continues to strengthen its

supervisory role and deepen its Risk-based approach to

supervision by developing directives, guidelines and
regulations for the industry. A number of guidelines and
regulations relating to corporate governance, loan writeoff,

outsourcing,

mergers

and

acquisition,

risk

management and establishment of representative offices

are at advanced stages

of discussion awaiting final

approval and issuance.

Conclusion
20.

For my concluding thought at todays lunch session,

Mr. Chairman, I ask the following five (5) fundamental

rhetorical questions which I know are not new to us.
i. How can we all as a collective unit in the banking industry
fund our middle-income country which is currently facing
some short-term challenges?
ii. How will banks enlarge outreach in terms of customer
base and product choices, and employ technology enabled
payment systems in an efficient, accessible and assured
manner?

iii. What modalities do we have in place to attract and retain

skilled manpower and leverage them for business growth
and risk mitigation in a responsible and responsive
manner?
iv. How will banks be able to mobilise the required amount of
capital to meet current and future transaction needs and
regulatory requirements? and;
v. How do we survive in a crisis situation?
Mr. Chairman, I am happy that the solutions and/or answers
to these pertinent questions are usually found in forums like
this and I am positive the banking industry in Ghana is capable
of converting the current challenges into potential opportunities
and would be better placed to serve efficiently, the real
economy. The Bank of Ghana, on its part, will continue to
create the enabling regulatory environment that can act as
catalyst in this process.
I wish you well in your deliberations.
Thank you and God bless us all.