BoG Cracks Whip On CBG Over Foreign Exchange Irregularities

 

In a bold move to enforce foreign exchange regulations, the Bank of Ghana has suspended the Foreign Exchange Trading Licence of Consolidated Bank Ghana (CBG) for a month, effective November 26, 2024.

This decisive action follows multiple breaches of foreign exchange market regulations, guidelines for inward remittance services, and anti-money laundering protocols.

CBG’s suspension is not an isolated incident. Earlier this year, Guaranty Trust Bank Ghana Limited and FBNBank Ghana Limited faced similar penalties for non-compliance with foreign exchange regulations.

These enforcement actions demonstrate the Bank of Ghana’s commitment to maintaining the integrity of the foreign exchange market.
The suspension stems from CBG’s failure to adhere to the Updated Guidelines for Inward Remittance Services for Payment Service Providers, issued in November 2023, and the Anti-Money Laundering/Combating the Financing of Terrorism & The Proliferation of Weapons of Mass Destruction (AML/CFT&P) Guideline, updated in December 2022.

To have its licensee restored, CBG must implement effective controls to ensure strict compliance with foreign exchange regulations.

The Bank of Ghana has issued a stern warning to all foreign exchange market players, emphasizing the importance of adhering to applicable regulations and guidelines.

Background

Consolidated Bank Ghana Ltd is an indigenous Ghanaian universal bank, licensed by the Bank of Ghana under the Specialized Deposit-Taking Institutions Act, 2016 (Act 930).

With a focus on personal and business banking, CBG offers various services, including remittance solutions and SME funding initiatives.

Implications And Next Steps

The one-month suspension will likely impact CBG’s foreign exchange trading operations, affecting customers and businesses reliant on these services.

To mitigate potential disruptions, CBG must promptly address the regulatory breaches and demonstrate compliance with foreign exchange regulations.

As the Bank of Ghana continues to monitor CBG’s progress, the banking sector can expect increased scrutiny and enforcement of foreign exchange regulations.

Market players would do well to take heed of this warning, ensuring their operations align with regulatory requirements to avoid similar penalties.

In the words of Sandra Thompson, Secretary to the Bank of Ghana, “The licensee will be restored at the end of the one-month suspension period once the Bank of Ghana is satisfied that CBG has put in place effective controls to ensure strict adherence
to the foreign exchange market regulation.”.

-BY Daniel Bampoe

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