Bank of Ghana Bill

MEMORANDUM

The object of this Bill is to revise the legislation governing the Central Bank.

It is realized that the current Bank of Ghana Law, 1992 (PNDCL 291) was promulgated before the 1992 Constitution, to govern the legal existence and operations of the Bank of Ghana as the Central Bank of Ghana. However, with the coming into force of the 1992 Constitution, it has become necessary to review the Law to ensure that it is in compliance with the dictates of the Constitution and also consistent with current developments within the financial sector.

To enable the Bank of Ghana discharge its functions effectively, the legal and regulatory framework must be constantly reviewed so that perceived weakness can be addressed. This would ensure that the legal and regulatory framework is supportive of the banking industry and also protective of the interests and assets of depositors and creditors.

The Constitution provides for the independence of the Bank of Ghana by defining its core functions and insulating the post of the Governor of the Bank from political influence. In this connection, the changes to the existing legislation as contained in this Bill, seek to reinforce the operational independence of the Bank by limiting the matters in which the Bank must consult and/or secure the approval of the Government in decision making.

To further reinforce the independence of the Bank of Ghana, the composition of its Board of Directors has been reviewed to allow for the appointment of three Directors from the Management Staff of the Bank, in addition to the Governor and the two Deputies. Consequently, six Board members out of twelve will come from within the Bank of Ghana will be in a strong and enviable position to reach decisions without the agreement of the other directors.

In line with the Constitution, the Bill seeks to vest the Bank with absolute control over all foreign exchange of the State. In the exercise of its control over the foreign exchange of the State, the Bank of Ghana is made answerable or accountable only to Parliament. This will ensure that Ghana's foreign exchange will be used judiciously in the interest of the economy without any political interference or consideration.

The Bill also re-confirms the Bank of Ghana's role in credit control by endowing it with absolute power, upon notifying the Minister of Finance, to use any instrument of control at its disposal to counteract any unusual movements in the money supply and to maintain and promote a balanced growth of the economy.

It is hoped that this Bank of Ghana Bill, when passed, will enable the Bank to effectively discharge its statutory obligations of controlling the money supply and credit to the economy, and ensuring monetary and price stability as well as promotion and maintenance of a balanced growth. It is hoped that the Bank will be better able to regulate the banking sector with a view to ensuring that banking practices are based on sound principles, and also eliminating all corrupt and dishonest practices as well as ensuring that only honest competent persons of integrity enter and remain in the banking sector.

Kwame Peprah

Minister of Finance

1^st June, 2000

ARRANGEMENT OF SECTION

PART I - THE BANK, ITS OBJECTS AND CAPITAL

Sections

1. Continued Legal Existence of Bank of Ghana

2. Head Office and branches

3. Objects and functions of the Central Bank

4. Authorised Capital of the Bank

5. General Reserve Fund, payment into Consolidated Fund

6. Revaluation Account

PART II - ADMINISTRATION

7. The Board of Directors

8. Policies to achieve Objects

9. Terms and conditions of service of members

10. Qualifications of member

11. Removal from the Board

12. Vacancy on the Board

13. Meetings of the Board

14. Committees of the Board

15. The Secretary

16. Appointment of Governor and Deputy Governors

17. Functions of the Governor

18. Emergency powers of the Governor

19. Functions of the Deputy Governors

20. Chief Internal Auditor

21. Other officers and employees of the Bank

22. Delegation of power of appointment

23. Signing of documents

24. Declaration of secrecy

25. Liability for loss

PART III - THE BANK AS BANKER AND FISCAL AGENT OF GOVERNMENT AND STATE INSTITUTIONS

26. Custodian of State funds

27. The banker for Government

28. Temporary advances

29. Management of the Public Debt

30. Adviser to Government on fiscal matters

PART IV - CREDIT CONTROL

31. Report on unusual movement in supply of money

32. Managing, the monetary and banking system

PART V - DOMESTIC OPERATIONS

33. Issue of notes and coins

34. Cover for notes and coins

35. Unit and denomination and form of currency

36. Appointment of other banks as currency agents

37. Currency cover assets of the Bank

38. Liabilities of issue

39. Legal tender

40. Refund of lost or imperfect currency notes or coins

41. Evidence of imitation of a currency note

42. Exemption from stamp duty on currency notes

43. Exchange of currency

44. Business transactions

45. Transactions in securities

46. Clearing houses

47. Business the Bank may not engage in

PART VI - FOREIGN OPERATIONS

48. Transactions in assets of international value

49. Power to borrow and guarantee

50. Exchange rate of the cedi

51. Control of foreign exchange

PART VII - BANKING SUPERVISION AND RESEARCH

52. Head of Banking Supervision and supervision of financial institutions

53. Statistical data and publication of bulletins and reports

54. Request for research information

PART VIII - ACCOUNT AND AUDIT

55. Accounts and audit

56. General returns

57. Returns relating to foreign exchange

58. Financial year of the Bank

59. Application of Part V of the Banking Law

PART IX - GENERAL AND SUPPLEMENTARY PROVISIONS

60. Training of employees of the Bank and bankers

61. Exemption from income tax

62. Liquidation

63. Act binds Republic

64. Bye-laws by the Board

65. Regulations

66. Offences and penalties

67. Offences by bodies of persons

68. Interpretation

69. Repeals

SCHEDULE

BILL

ENTITLED

BANK OF GHANA ACT, 2000

AN ACT to amend and consolidate the law relating to the Bank of Ghana and to provide for related matters.

BE IT ENACTED by Parliament as follows:

PART I - THE BANK OF GHANA, ITS OBJECTS AND CAPITAL

Continued legal existence of Bank of Ghana

1. (1) The Bank of Ghana in existence immediately before the commencement of this Act shall, subject to this Act, continue to be in existence as a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

(2) The Bank referred to in subsection (1) shall be the Central Bank of Ghana and may, in relation to its business purchase, hold, manage and dispose of movable and immovable property and may enter into a contract or a transaction as may be expedient.

(3) The application of the common seal of the Bank shall be authenticated

(a) by the Governor; or

(b) in the absence of the Governor, by a Deputy Governor, and two directors all of whom shall certify the validity of the authentication and that signing shall be independent of the signing by any other person who may sign the instrument as a witness.

Head Office and branches

2. The Bank shall have its head office in Accra and may, where it is considered necessary for the performance of its functions, open branches and have agencies or agents in and outside Ghana.

Objects and functions of the Central Bank

3. (1) The objects of the Bank are to

(a) promote and maintain the stability of the currency of Ghana and direct and regulate the currency and payment system in the interest of the economic progress of Ghana; and

(b) encourage and promote economic development and the efficient utilisation of the resources of Ghana through effective and efficient operation of a banking and credit system in Ghana.

(2) The Bank shall for the purposes of subsection (1) perform the following functions

(a) promote by monetary measures the stabilization of the value of the currency within and outside Ghana;

(b) institute measures which are likely to have a favourable effect on monetary stability, the balance of payments, movement of prices, the state of public finances and the general development of the national economy;

(c) regulate and direct the credit and financial system and support the general economic policy of the Government independent of instructions from the Government;

(d) establish, operate, promote and supervise the payment, fund transfer, clearing and settlement systems;

(e) issue and redeem bank notes and coins;

(f) ensure effective maintenance and management of Ghana's external reserves;

(g) licence, regulate and supervise non-banking financial institutions specified by law;

(h) act as banker and financial adviser to the Government;

(i) promote and maintain relations with international banking and financial institutions; and

(j) to do all other things that are incidental or conducive to the efficient performance of its functions under this Act and any other enactment.

(3) The Bank may in writing authorize any person to exercise its power to regulate and supervise non-banking institutions.

Authorised capital of the Bank

4. The authorized capital of the Bank shall be five hundred billion shares which shall be taken up form time to time by the Government and may be increased from time to time.

General Reserve Fund, payment into Consolidated Fund

5. (1) There shall continue to be a General Reserve Fund of the Bank.

(2) At the end of each financial year of the Bank, after allowing for the operational expenses and after provision has been made for bad and doubtful debts, depreciation of assets, replacement of currency, development fund, contributions to staff and superannuation fund and other contingencies, there shall be transferred to the General Reserve Fund

(a) one-half of the net profit of the Bank if the amount of money in that Fund is less than the paid-up capital of the Bank; or

(b) one-quarter of the net profit of the Bank, if the amount of money in that Fund is less than twice the amount of the paid-up capital of the Bank.

(3) Money remaining after the transfer under subsection (2) shall

(a) where there is a balance of government indebtedness in the books of the Bank, be used to set off the indebtedness; and

(b) where there is no balance of government indebtedness in the books of the Bank, be paid into the Consolidated Fund.

(4) Where at the end of a financial year the amount of money in the General Reserve Fund is more than twice the amount of the paid-up capital, a proportion of the profit, as may be agreed upon between the Bank and the Minister, shall be paid into the Consolidated Fund.

Revaluation Account

6. (1) Profits or losses arising from a revaluation of the Bank's assets or liabilities in gold, special drawing rights, foreign exchange or foreign securities as a result of a change in the par value of the cedi or of any change in the par value of the currency unit of any other country shall be excluded form the computation of the annual profits or losses of the Bank.

(2) The profits and losses arising under sub-section (1) shall be carried to a special account to be known as the 'Revaluation Account'.

(3) Profits shall not be paid into the General Reserve Fund or the Consolidated Fund under sub-section (2) or (3) of section 5 where the Revaluation Account shows a net loss and the profits not paid into the General Reserve Fund shall be credited to the Revaluation Account in an amount sufficient to cover the losses.

(4) Where the profits referred to under sub-section (1) are insufficient to cover the losses of the Bank in a financial year, the Government shall cause to be issued to the Bank redeemable non-negotiable non-interest bearing securities to the extent of the deficiency.

(5) A credit balance in the Revaluation Account at the end of a financial year of the Bank shall be applied to redeem the outstanding securities issued under sub-section (4).

The Board of Directors

7. The governing body of the Bank shall be a Board of not more than twelve Directors consisting of,

(a) the Governor of the Bank who shall be the chairman;

(b) the First and Second Deputy Governors appointed under this Act;

(d) one representative of the Ministry of Finance; and

(e) five other directors appointed by the President in consultation with the Council of State.

Policies to achieve objects

8. (1) The Board shall formulate policies necessary for the achievement of the objects of the Bank.

(2) The Governor is answerable to the Board for the acts and decisions of the Governor.

Terms and conditions of service of members

9. (1) The members of the Board, other than the Governor and the two Deputy Governors, shall hold office for a period of three years but are eligible for re-appointment.

(2) The members, other than the Governor and the two Deputy Governors and Executive Directors shall be paid appropriate allowances to be determined by the Board.

Qualification of members

10. (1) A person does not qualify to be appointed as a member of the Board who

(a) is not a citizen of Ghana;

(b) has become bankrupt or suspends payment or compounds with the creditors of that person;

(d) is adjusted to be a person of unsound mind; or

(e) in the case of a person possessed of professional qualification, that person is disqualified or suspended, otherwise than at the request of that person, from practicing the profession of that person by order of a competent authority made in respect of that person.

Removal from the Board

11. A member shall cease to hold office if that member

(a) becomes a person of unsound mind or incapable of carrying out the duties of that member;

(b) becomes bankrupt or suspends payment or compounds with the creditors of that member;

(d) is guilty of serious misconduct in relation to the duties of that member; or

(e) in the case of a person possessed of professional qualification, that member is disqualified or suspended from practicing the profession of that member by the order of a competent authority, made in respect of that member or ceases to be a member of the profession otherwise than at the request of that member.

Vacancy on the Board

12. Where a member dies, resigns or otherwise vacates office before the completion of the term of office another person shall be appointed

(a) in the case of the Governor or a Deputy Governor, for a period of four years;

(b) in the case of any other Director for the unexpired period of that member.

Meetings of the Board

13. (1) The Governor shall summon meetings of the Board as often as may be required but not less frequently than once in each month.

(2) The Governor shall preside at the meetings of the Board and

(a) in the absence of the Governor, the First Deputy Governor shall preside, or

(b) in the absence of the Governor and the First Deputy Governor, the Second Deputy Governor shall preside, and

in the absence of the Governor and the two Deputy Governors, a member elected by the members present at the meeting shall preside.

(3) The quorum for a meeting of the Board shall be seven members three of whom shall be directors referred to under section 7(e) of this Act.

(4) A member who has an interest, whether direct or indirect, in a matter that is considered or dealt with by the Board shall disclose in writing to the Board the nature of that interest and shall not participate in a discussion or decision of the Board on that matter.

(5) Where a member fails or refuses to disclose interest under sub-section (4), the member shall cease to be a member.

(6) Decisions of the Board shall be determined by a simple majority of the members present and voting except that where there is an equality of votes on an issue before the Board, the person presiding shall have a casting vote.

(7) The Board may, where it considers it fit, invite a person to assist at its meeting but a person so invited is not entitled to vote at that meeting on a matter for decision by the Board.

(8) The validity of the proceedings of the Board shall not be affected by a vacancy among its membership or by a defect in the appointment of any of the members.

(9) An act done by a member acting in good faith as a member is valid, notwithstanding a defect in the appointment or qualification of that member.

(10) Except as otherwise provided in this section, the Board shall determine the procedure for its meetings.

Committees of the Board

14. The Board may appoint a number of committees that are necessary for the purpose of advising the Board.

The Secretary

15. The Bank shall have an officer designated the Secretary who shall be appointed by the President acting in accordance with the advice of the Board given in consultation with the Public Service Commission to perform the functions of maintaining a secretariat for the Board and ensuring that accurate records of the proceedings and the decisions of the Board are kept.

Appointment of Governor and Deputy Governors

16. (1) The Governor and the two Deputy Governors referred to in section 7 shall be

(a) persons of recognised financial or banking experience; and

(b) appointed by the President acting in consultation with the Council of State.

(2) The Governor and the Deputy Governors shall each be appointed for a term of four years each and each one is eligible for re-appointment.

(3) Unless otherwise permitted by the Board in writing, the Governor and the Deputy Governors shall not, while holding office under this Act, occupy any other office or employment whether there is remuneration attached to it or not.

(4) Notwithstanding sub-section (3), the Governor or a Deputy Governor may, with the approval of the Board,

(a) act as a member of a commission appointed by the Governor to enquire into a matter affecting currency or banking;

(b) act as a member of the Board of an international bank or an international monetary authority or any other institution to which the Government gives support.

(5) Subject to the Constitution and this section, the Governor and the two Deputy Governors shall be appointed on terms and conditions determined by the Government.

(6) The two Deputy Governors shall be designated as First Deputy and Second Deputy Governor respectively.

Functions of the Governor

17. (1) The Governor shall, subject to the directions given by the Board on maters of policy and subject as expressly provided in this Act, be entrusted with the day-to-day business and administration of the Bank, and may make decisions and exercise all powers and perform the functions which may be exercised and performed by the Bank.

(2) Without prejudice to sub-section (1), the Governor shall

(a) execute the policies of the Board;

(b) make regular reports to the Board on the management and operations of the Bank;

(c) provide the data, statistics and advice necessary for the formulation of policies for the attainment of the objects of the Bank; and

(d) perform any other functions directed by the Board.

Emergency powers of the Governor

18. (1) Where there is an internal disorder, external exigencies, national disaster or critical financial or economic crisis or other exigencies requiring immediate action and there is insufficient time to call a meeting of the Board, the Governor may, after giving notice to the Minister, exercise the powers of the Board and take necessary action.

(2) The Governor shall, as soon as practicable after having taken action by virtue of subsection (1), call a meeting of the Board and report the action taken for ratification or review by the Board.

Functions of the Deputy Governors

19. (1) The Deputy Governors shall assist the Governor in the performance of the functions of the Governor under this Act in the area that the Governor may in consultation with the Board, determine.

(2) In the absence of the Governor, the First Deputy Governor shall have authority to perform the functions of the Governor under this Act and in the absence of both the Governor and the First Deputy Governor the Second Deputy Governor shall have authority to perform the functions of the Governor.

Chief Internal Auditor and Audit Committee

20. (1) The Bank shall have a Chief Internal Auditor who shall be appointed by the President in accordance with the advice of the Board given in consultation with the Public Services Commission.

(2) Subject to this Act, the Chief Internal Auditor is responsible to the Governor in the performance of functions of office as Chief Internal Auditor.

(3) The Chief Internal Auditor shall, as part of the functions of office, at intervals of three months, prepare a report on the internal audit work carried out by the Chief Internal Auditor during the period of three months immediately preceding the preparation of the report, and submit the report to the Governor who shall place the report before the Board.

(4) There shall be appointed by the Board an Audit Committee whose chairman shall be the Chief Internal Auditor;

(5) The Audit Committee shall consist of three members and its responsibilities shall be to:

(a) establish appropriate accounting procedures and accounting controls for the bank, supervise compliance with these procedures, and audit the bank's accounts and records;

(b) monitor compliance with laws and regulations applicable to the bank and report to the board of directors thereon; and

(6) The Audit Committee shall meet ordinarily once per quarter and extraordinarily when convened by the board of directors or management.

Other officers and employees of the Bank

21. (1) The President in accordance with the advice of the Board given in consultation with the Public Services Commission may appoint other officers and employees for the Bank.

(2) Subject to this Act, the officers and employees of the Bank shall hold office or appointment on the terms and conditions specified in their letters of appointment.

(3) The salaries, fees, wages or other remuneration or allowances paid by the Bank shall not be computed by reference to the net or other profits of the Bank.

Delegation of appointment of public officers

22. Subject to section 16, the President may in accordance with article 195(2) of the Constitution delegate the power of appointment of public offices under this Act.

Signing of documents

23. (1) The Board may empower the Governor; a Deputy Governor or an employee of the Bank in writing generally or in respect of a particular document or class of documents to sign for and on behalf of the Bank.

(2) The Governor and the employees of the Bank empowered under subsection (1), authorized by the Board b notification in the Gazette, are hereby severally empowered for and on behalf of the Bank to endorse and transfer promissory notes, stock-receipt, debenture stock, shares, securities and documents of title to goods standing in the name of, or held by, the Bank.

Declaration of secrecy

24. (1) The employees of the Bank of all classes of designation shall be bound by a declaration of secrecy unless they are otherwise called upon to give evidence in a court or to fulfil an obligation imposed by law.

(2) For the purposes of this section a former employee of the Bank is similarly bound and shall not disclose any information whether documentary or otherwise relating to the affairs of the Bank except b order of a court of competent jurisdiction or to fulfil an obligation imposed by law.

(3) A person who contravenes a provision of this section commits an offence and is liable on summary conviction to a fine not exceeding 25 penalty units or to imprisonment for a term not exceeding two years or to both.

Liability for loss

25. An employee of the Bank is liable for loss or damage suffered by the Bank as a result of any willful default or negligence of that employee.

PART III - THE BANK AS BANKER AND FISCAL AGENT OF

GOVERNMENT AND STATE INSTITUTIONS

Custodian of State Funds

26. The Bank shall be the sole custodian of the state funds both in and outside Ghana, and may be notice published in the Gazette authorize any other person or institution to act as custodian of any such funds as may be specified in the notice that the Bank may specify.

The banker for Government

27. (1) The Bank shall receive, collect, pay and remit money, bullion and securities on behalf of the Government.

(2) The Bank shall accept custody of all securities, documents and other valuable objects belonging to the Government.

(3) The Bank may act as banker to any Government institution or agency.

(4) In a place where the Bank does not have a branch, the Bank may appoint a banking institution to act as its agent for the collection and payment of Government moneys

(5) An agent which collects money for and on behalf of the Bank under sub-section (4) shall as soon as practicable, remit the money to the Bank.

(6) Interest shall not be paid by the Bank on amounts deposited in a Government account.

(7) Except as otherwise determined by agreement with the Minister, the Bank shall not receive from the Government remuneration for its services under this section.

(8) Subject to this section, the Bank may undertake and transact a business which the Government may entrust to the Bank.

Temporary advances

28. (1) The Bank may

(a) make advances and loans to the Government on overdraft or in any other form that the Board may determine;

(b) make direct purchase from the Government of treasury bills or securities representing obligations of the Government.

(2) The total of the loans, advances, purchase of treasury bills and securities together with money borrowed by the Government form other banking institutions and the public at the close of a financial year under subsection (1) shall not exceed 10 percent of the total tax revenue of the fiscal year in which the advances were made.

(3) An advance made under sub-section (1) shall be repaid within three months after the grant of the advance, and where that advance remains unpaid after the due date, the power of the Bank to make further advances in a subsequent financial year shall not be exercised unless the amounts due in respect of outstanding advances have been repaid.

(4) Where repayment of the advances and overdrafts is unduly delayed, the Bank may transfer the debt to the public through the sale of treasury bills.

(5) The Bank may grant loans and advances to Government agencies for the purchase of agricultural produce and any other products that the Bank may determine for sale to the public or for export.

(6) Loans and advances made under subsection (5) shall be repaid as soon as the products are sold and within a period of twelve months from the date of the loan or advance.

(7) The Bank shall charge interest on advance granted under this section at the rate that the Board may in consultation with the Minister, determine.

Management of the Public Debt

29. The Bank shall be entrusted with the issue and management of Government loans publicly issued upon the terms and conditions that are agreed between the Government and the Bank.

Adviser to Government on fiscal matters

30. The Bank shall proffer advise to Government on

(a) the monetary operations of the Government and Government agencies; and

(b) the international and local contracts to which the Government is a party and which relate to the object and functions of the Bank.

PART IV - CREDIT CONTROL

Report on unusual movement in supply of money

31. (1) Where the Board considers that there are unusual movements in the money supply and prices detrimental to a balance growth of the national economy, it shall subject to this Act, make as soon as practicable a report of this to the Minister specifying the causes which in its opinion led to the situation.

(2) The Bank, in counteracting unusual movements in the money supply and prices in the country shall, after consultation with the Minister, use any of the instruments of control conferred upon it under this Act or under any other enactment to maintain and promote a balanced growth of the national economy.

Managing the monetary and banking system

32. Without prejudice to sub-section (2) of section 31, the Bank may, for the purposes of monetary management.

(a) alter the minimum ratio of reserve to deposits or the minimum capital adequacy ratio which each banking institution shall maintain;

(b) alter the discount and interest rates of the Bank to be applied in credit operations with banking institutions;

(c) buy or sell in the open market commercial bills, Government bonds and securities or bonds and securities guaranteed by the Government;

(d) issue, sell, re-purchase or redeem Bank of Ghana securities;

(e) impose ceiling on the level of bank credit or the rate of growth of bank credit;

(f) expand or contract credit facilities to the banks;

(g) determine the meximum lending period by banking institutions, the kind of collateral and amount of loan against that collateral;

(h) grant loans to banks for, on-lending to institutions engaged in industrial, commercial or agricultural projects repayable on demand or on the expiry of a fixed period and on any other terms and conditions that the Board may determine;

(i) authorize a banking institution that it considers fit to accept deposits for the Government or order the transfer of Government deposits with any bank;

(j) impose special requirements on deposit with banking institution that it may determine;

(k) impose such other measures as the Board may in consultation with the Minister determine.

PART V - DOMESTIC OPERATIONS

Issue of notes and coins

33. The Bank is the only authority to issue and re-issue currency notes and coins in Ghana.

Cover for notes and coins

34. The Bank shall hold assets to cover the currency notes and coins issued by the Bank.

Unit and denomination and form of currency

35. (1) the unit of currency shall be the Cedi which shall be divided into one hundred pesewas, one pesewa being one hundredth part of a cedi.

(2) The Bank shall issue currency notes and coins of the denominations that are approved by the Board.

(3) Currency notes and coins issued by the Bank shall be of the forms and designs that are approved by the Board.

(4) The standard weight and composition of coins issued by the Bank and the amount of remedy and variation shall be determined by the Board.

(5) The currency issued by the Bank shall be printed or minted by the Bank or under the authority of the Bank.

Appointment of other banks as currency agents

36. The Bank may appoint a banking institution to act as agent for the issue, re-issue, exchange and withdrawal of currency notes and coins on the term and conditions that are agreed between the Bank and that banking institution.

Currency cover assets of the Bank

37. (1) The currency cover assets of the Bank may include

(a) gold, gold coin and bullion;

(b) convertible currency notes and coins and bank balances in convertible currency with a bank outside Ghana;

(d) bills of exchange bearing at least two good signatures drawn on a place outside Ghana, payable in convertible currency and having a maturity not exceeding three months exclusive of days of grace;

(e) securities of Government other than the Government of Ghana expressed in convertible currency;

(f) special drawing rights;

(g) securities or bonds in convertible currency issued by any international financial institution or bank; and

(h) subject to sub-section (2)

(i) treasury bills of the Government denominated in cedis and maturing within ninety-one days;

(ii) other securities of the Government denominated in cedis and maturing in not more than twenty years which have been publicly issued or form part of an issue which is being made to the public at the time of acquisition.

(2) The aggregate holding of treasury bills and of securities under paragraph (h) of sub-section (1) shall not at any time exceed sixty per cent of he currency in circulation.

Liabilities for issue

38. (1) The currency cover assets of the Bank shall be available to meet only the liabilities of the Bank as represented by the total of the amount of currency notes and coins issued by the Bank and are in circulation.

(2) Where at any time the assets of the Bank including funds in the General Reserve Fund and the Revaluation Account are insufficient to meet demands for the redemption of notes and coins, that deficiency shall be a charge on the Consolidated Fund.

Legal tender

39. (1) Currency notes issued by the Bank shall be legal tender at their face value.

(2) Coins issued by the Bank shall, if those coins have not been tampered with, be legal tender for payments up to an amount not exceeding

(a) five thousand cedis in the case of coins of denominations of one hundred, two hundred and five hundred cedis;

(b) one thousand cedis in the case of denominations of not less than twenty cedis; and

(3) For the purpose of this Act, a coin shall be deemed to have been tampered with if the coin has been

(a) impaired, diminished or lightened otherwise than by fair wear and tear; or

(b) defaced by stamping, engraving or piercing whether the coin has been thereby diminished, lightened, or not.

(4) The Bank may, on giving not less than three months notice in the Gazette, call in any of its currency notes and coins on payment of the face value; and the notes or coins with respect to which a notice has been given under this subsection shall, on the expiration of the notice, cease to be legal tender.

Refund of lost or imperfect currency notes or coins

40. (1) A person shall not be entitled to recover from the Bank the value of any mutilated or imperfect currency note or a coin tampered with.

(2) Notwithstanding sub-section (1), the Governor may permit the exchange of the amount of any mutilated or imperfect currency notes or coins as determined by the Governor.

Evidence of imitation of a currency note

41. Where in proceedings in a court it has to be determined whether a document purporting to be a currency note is an imitation of a currency note, a certificate in the form set out in the Schedule under the hand of the Governor or the First or Second Deputy Governor shall be received in evidence without further proof as conclusive evidence of the fact that the document is an imitation of a currency note.

Exemption from stamp duty on currency notes

42. The Bank is not liable for the payment of a stamp duty under an enactment in respect of currency notes issued by it.

Exchange of currency

43. (1) A person who delivers to the Bank an amount of currency is entitled to receive from the Bank in exchange, without charge, currency notes or coins of the same amount and of the denomination as that person may require.

(2) Where the Bank is unable to give currency notes or coins of the denomination required under subsection (1), it shall give that person currency notes or coins of the next nearest denomination.

Business transaction

44. The Bank may, subjection to this Act and the policies of the Bank, undertake or transact any or all of the following:

(a) accept deposits and make payments;

(b) issue demand drafts and other forms of remittances made payable at its own offices or the offices of agencies or correspondents;

(d) purchase, sell, discount and rediscount inland bills of exchange and promissory notes arising out of bona fide commercial transactions bearing two or more authorized signatures and maturing within ninety days, exclusive of days of grace from the date of acquisition;

(e) purchase, sell, discount and rediscount inland bills of exchange and promissory notes bearing two or more authorized signatures drawn or issued for the purpose of financing seasonal agricultural operations or the marketing of crops and maturing within one hundred and eighty days, exclusive of days of grace from the date of acquisition;

(f) purchase, sell, discount and rediscount treasury bills of the Government publicly issued and maturing within ninety-one days of the issue;

(g) purchase and sell for the Bank's account, Government securities and guaranteed securities of other public corporations;

(h) grant, on the conditions determined by the Bank, advances to financial institutions for fixed periods not exceeding three months against publicly issued treasury bills of the Government maturing within ninety-one days of the issue;

(i) grant long-term loans to financial institutions engaged in agricultural and industrial development in Ghana;

(j) grant advances for a fixed period not exceeding three months at the interest rate determined by the Bank against promissory notes secured by the pledge with the Bank of

(i) gold, gold coin or bullion;

(ii) securities of the Government which have been publicly offered for sale and are to mature within a period of twenty years;

(iii) warehouse warrants or their equivalent (securing possession of goods) in respect of staple commodities or other goods duly insured with a letter of hypothecation from the owner;

(l) accept from customers for safe custody moneys, securities and other articles of value; and collect proceeds whether principal, interest or dividend on the moneys, securities or articles of issue; and

(m) generally conduct the business of banking.

Transactions in securities

45. The Bank may issue securities of its own, specify the conditions for the securities and sell or purchase them.

Clearing houses

46. The Bank shall facilitate the clearing of cheques and other credit instruments for banking institutions.

Business the Bank may not engage in

47. (1) Except as authorized by the Minister, the Bank shall not

(a) engage in a trade or have a direct interest in any commercial, agricultural, industrial or any other undertaking except an interest that the Bank may acquire in the course of the satisfaction of debts due to it;

(b) purchase the shares of a company except shares of a financial institution or grant loans upon the security of shares;

(c) advance money on mortgage or otherwise on the security of immovable property or the title deeds relating to that property; or become the owner of an immovable property except in so far as it is necessary for its own business premises and residence of its staff and employees;

(d) draw or accept bills payable otherwise than on demand;

(e) pay interest on deposits; or

(f) accept for discount or as guarantee for an advance made by the Bank, bills or notes signed by members of the Board or by the Bank's officials or other employees.

(2) Notwithstanding paragraph © of subsection (1), the Bank may for the purpose of acquisition of houses by its staff advance money on mortgage to a member of staff as determined by the Board.

PART VI - FOREIGN OPERATIONS

Transaction in assets of international value

48. (1) The Bank may

(a) purchase and sell external convertible currencies;

(b) discount and re-discount treasury bills drawn in convertible currencies;

(d) import, export, refine, hold, sell, transfer or otherwise deal in gold, gold coins and bullion, silver, platinum and any other precious metals as determined by the Board;

(e) accept deposits from foreign banking institutions, international financial institutions, foreign governments and their agencies or the organs of the United Nations;

(f) acquire, hold and transfer foreign exchange and foreign government securities;

(g) maintain accounts with central banks and reputable international financial institutions;

(h) act as correspondent bank or agent for an international banking institution or a monetary authority;

(i) effect foreign exchange transactions of any kind.

(2) The Bank shall not acquire, hold or transfer any foreign government securities unless those securities are denominated in convertible currency.

Power to borrow and guarantee

49. (1) The Bank may, with the prior written approval of the Minister,

(a) borrow from foreign institutions and pledge assets held by its as security for the repayment of the loan, except that the Bank may, without the approval of the Minister, borrow money for a period not exceeding ninety days for the day-to-day operations of the Bank;

(b) lend money or grant short-term credits to any institutions; but the Bank may, without the approval of the Minister, lend to those institutions in the ordinary course of business.

(2) The Bank may, at the written request of the Minister, guarantee a loan granted to the Government or an agency of Government by a foreign institution.

(3) The Government may guarantee on behalf of the Republic a loan granted under paragraph (a) of subsection (1).

Exchange rate of the cedi

50. The Board may, in consultation with the Minister, take a decision it considers fit for the determination of the exchange rate of the cedi in relation to external currencies.

Control and auditing of foreign exchange

51. The Bank shall hold and control all foreign exchange of the State and be responsible to Parliament in the performance of its duty under this section.

PART VII - BANKING SUPERVISION AND RESEARCH

Head of Banking Supervision and supervision of financial institutions

52. (1) The Bank shall have an officer designated as the Head of the Banking Supervision Department of the Bank who shall be appointed by the President acting in accordance with the advice of the Board given in consultation with the Public Services Commission.

(2) The Head of the Banking Supervision Department shall be responsible for the supversion and examination of all banking institutions in the country and perform functions specified under any enactment to be performed by the Head of the Banking Supervision Department.

Statistical data and publication of bulletins and reports

53. For the purpose of providing the Board with information necessary for the proper formulation of monetary and credit policies, the Bank shall

(a) collect and prepare statistics on money and banking, public finance, prices, wages, production, the balance of payment and any other statistical data that the Board may direct;

(b) publish a monthly and quarterly bulletin on economic and financial indicators;

(d) perform any other duties that the Board may direct.

Request for research information

54. (1) For the effective conduct of research, the Bank may request from an institution or a person information relating to money or banking, balance of payments and any other subjects that that Board may direct.

(2) Information received under subsection (1) shall be treated with the utmost confidence.

(3) A publication for statistical purpose or information obtained under subsection (1) shall not include a personal data.

(4) A person who fails to supply an information requested under sub-section (1) commits an offence and is liable on summary conviction to a fine not exceeding 500 penalty units or to imprisonment for a term not exceeding 2 years or both and where the offence is continued after conviction, to a further fine not exceeding 5 penalty units for every day on which the offence is continued.

PART VIII - ACCOUNTS AND AUDIT

Accounts and audit

55. (1) The Bank shall keep books of accounts and proper records in relation to them.

(2) The books of accounts of the Bank shall be audited by the Auditor-General or any other auditors appointed by the Auditor-General.

(3) Without prejudice to sub-section (2), the Minister may at any time request the Auditor-General to make an examination of the accounts of the Bank and submit a report on the accounts and the Auditor-General shall comply with that request.

General returns

56. (1) The Bank shall, within three months from the end of each financial year,

(a) transmit a copy of the annual accounts certified by the Auditor-General to the Minister who shall cause the annual accounts to be published in the Gazette as soon as practicable; and

(b) submit to the Minister an annual report of the Board on its working during the financial year in question which shall be published by the Bank within six months from the end of the financial year to which it relates.

(2) The Minister shall, not later than one month after receiving the annual report, submit a report on the Bank's annual report to the Government.

(3) The Bank shall, after the fifteenth day and the last day of each month, prepare and publish a return of its assets and liabilities as at the close of business on those days; or if either of those days is a holiday, then at the close of business on the last preceding business day; and a copy of the return, shall be transmitted to the Minister and shall be published in the Gazette.

Returns relating to foreign exchange

57. (1) The Bank shall, not later than three months

(a) after the end of the first six months of its financial year, and

(b) after the end of its financial year,

submit to the Auditor-General for audit a statement of its foreign exchange receipts and payments or transfers in and outside Ghana.

(2) The Auditor-General shall, not later than three months after the submission of the statement referred to in sub-section (1), submit the report on that statement to the Board for its comments and subsequently to Parliament.

Financial year of the Bank

58. The financial year of the Bank shall be the same as the financial year of the Government.

Application of part V of the Banking Law

59. The following provisions of the Banking Law, 1989 (P.N.C.L. 225) or any statutory re-enactment or modification of the Law shall with the modifications that are necessary apply to accounting and auditing under this Part:

(a) section 31 (which relates to the matter of keeping the banks' account);

(b) section 34(3) (which relates to the qualifications of the auditors of banks);

(d) section 38 (which relates to the auditors' right of access to and demand for information).

PART IX - GENERAL AND SUPPLEMENTARY PROVISIONS

Training of employees of the Bank and bankers

60. (1) The Bank may, in co-operation with banking institutions in the country or with any other bodies determined by the Board establish educational institutions and facilities for the training of employees for the Bank and for the banking institutions in the country.

(2) Sub-section (1) shall be without prejudice to any other banking training facilities that an institution or individual bank may have or provide.

Exemption from income tax

61. The Bank is exempted from the payment of income tax in respect of its functions under this Act.

Liquidation

62. The Bank shall not be placed in liquidation except in accordance with legislation passed for that purpose.

Act binds Republic

63. This Act shall bind the Republic

Bye-laws by the Board

64. The Board may, with the prior approval of the Minister, make bye-laws or issue notices, not inconsistent with this Act for the purposes of regulating the administration of the Bank and for the performance of its functions.

Regulations

65. The Minister may, after consultations with the Board by legislative instrument, make Regulations that are necessary to give effect to this Act.

Offences and penalties

66. Except as otherwise provided in this Act, a person who

(a) contravenes a provision of this Act or Regulations made under this Act, or anything prescribed or direction made or given under this Act and published in the Gazette, or

(b) knowingly makes an incorrect statement in a document submitted by that person or an incorrect reply to a question asked of that person for the purposes of this Act,

commits an offence and is liable on summary conviction to a fine not exceeding 250 penalty units or to imprisonment for a period not exceeding two years or to both.

Offences by bodies of persons

67. (1) Where an offence is committed under this Act or under Regulations made under this Act by a body of persons,

(a) in the case of a body corporate, other than a partnership, every director or an officer of that body shall be deemed to have committed that offence; and

(b) in the case of a partnership, every partner or officer of that body shall be deemed to have committed that offence.

(2) A person shall not be convicted of an offence by virtue of subsection (1), if that person proves that the offence was committed without the knowledge or connivance of that person, and that that person exercised all due care and diligence to prevent the commission of the offence having regard to all the circumstances.

Interpretation

68. In this Act, unless the context otherwise requires,

"Auditor-General" includes an auditor appointed by the Auditor-General;

"Bank" means the Bank of Ghana continued in existence by section 1;

"Board" means the Board of Directors established under section 7;

"financial institution" means an entity which may be either a depository financial institution such as a commercial bank, savings and loans company, mutual savings company, credit union or a non-depository financial institution such as a brokerage firm, insurance company, pension fund, investment company, which carries on the business of or a part of whose business is any of the following activities.

(a) taking of deposits of money from the public repayable on demand and withdrawable by cheques, drafts, orders or by other means

(b) financing of any activity by way of creating financial assets such as loans and advances, securities, bank deposits or otherwise other than its own.

(d) Leasing letting or delivering goods to a hirer under a hire purchase agreement

(e) Carrying on by insurance companies of any business other than insurance

(f) Collecting of money or accepting employer contributions and paying it out for legitimate claims or for retirement benefits.

"financial system" means a network of deposit-taking and non deposit-taking financial institutions and entities providing financial services to the public.

"foreign exchange" means

(a) currency notes, bank notes or coins other than the currency of Ghana which are legal tender in any other country and are convertible into currency which is legal tender in any other country;

(b) bills of exchange, travelers cheques, convertible currency, foreign government treasury bills, securities and bonds, promissory notes and balance in a bank payable otherwise than in the currency of Ghana;

"foreign institutions" means banking or financial institutions of foreign governments and agencies or institutions acting on behalf of foreign governments, banking or financial institution;

"functions" includes powers and duties;

"Government" means the Government of Ghana;

"liquid assets" has the same meaning as in section 48 of the Banking Law 1989 (PNDCL 225);

"member" means a member of the Board;

"Minister" means the Minister responsible for Finance;

"prescribed" means prescribed by Regulations made under section 65.

"settlement system" means an arrangement by which action is taken to discharge any obligation in respect of funds or security transfers between two or more parties.

Repeals and savings

69. (1) The Bank of Ghana Law 1992 (PNDC 291) is hereby repealed.

(2) Notwithstanding the repeal of the enactment specified in sub-section (1) any Regulations, bye-laws, notices, orders, directions, appointments, other act lawfully made or done under the repealed enactments and in force immediately before the commencement of this Act shall be deemed to have been made or done under this Act and shall until revoked, cancelled, withdrawn, or terminated continue to have effect.

(3) Every contract in respect of any mater subsisting between the Bank and any other person and in force immediately before the commencement of this Act, shall be deemed to subsist between the Bank and the other person.

(4) The assets and liabilities of, and property vested in the Bank immediately before the coming into force of this Act shall, without further authority than this subsection vest in the Bank.

SCHEDULE

(Section 41)

I, ………………………………………………………………………. Governor/Deputy

Governor of the Bank of Ghana for the times being acting as the chief executive officer of the Bank, do hereby certify that I have examined the document marked

………………………………………………………………………………………….

which purports to be a bank not of the denomination

………………………………………………………………………………………….

bearing the number ………………………………………… and dated………………..

and that the document is an imitation of a bank note and is not a bank not issued or deemed to be issued by the Bank of Ghana.

Date of Gazette notification: 9^th June 2000.