The decision to set up the committee was reached at an earlier meeting between the president and the local banks.
The 10-member committee will comprise of three members from the Bank of Ghana, three members from the Ministry of Finance, three members from the local banks and a chairperson to be nominated by the president.
According to JoyBusiness sources, the Committee should be ready by Tuesday 17th April and the final report be ready by 26th May.
Petition by local banks
In a petition cited by JoyBusiness, the local banks stated, “Your Excellency, Bank of Ghana’s past directives on new capital requirements had always given an adequate time of an average of 4 years for compliance by banks.
"The last directive in 2008 gave local banks 4 years and 10 months after the intervention by His Excellency, the then President of the Republic of Ghana in response to a petition by the Association of Indigenous Banks.
“The current increase in the minimum capital from GH¢120million to GH¢400million announced by Bank of Ghana in September 2017, giving the banks one year and three months to comply, is too short and if the duration is not extended sufficiently, its attainment by the indigenous banks could lead to a wholesale of the indigenous banks to foreigners.
"Such a situation will put the control of the banking industry in the hands of foreigners which could have future negative consequences on the economy particularly in the provision of credit to the agricultural sector and the informal sector in general,” it concluded.
The committee would also look into other issues like having a level playing field for both local and foreign banks when it comes to government projects and taking steps to deal with payment of the Non-Performing loans, which has reached over GH¢8 billion as at the end of last year.
BOG remains resolute
In the meeting, proposals were made to the local banks to look at merging in other to meet the capital requirement of GH¢400 million.
JoyBusiness understands that proposals to extend the December deadline might not be granted since the Bank of Ghana is insisting to press ahead with its directive.
According to persons close to the Central Bank, they believe the best way out is to merge or look at moving into lower-tier of banking like Savings and loans.
Read content of the petition below
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