[ 2016-08-13 ]

Nana Otuo Acheampong

32 banks for Ghana’s economy okay – Nana Otuo Acheampong
Banking consultant, Nana Otuo Acheampong has
stated that the increasing number of banks in the
country is not a disincentive to the industry but
an avenue that can stimulate good competition.

According to him, having more banks licensed will
lead to intense competition in Ghana’s banking
industry, with respect to size of deposits and the
size of market share of the various banks.

His comments come at a time when three new banks
have entered the industry, putting the total
number of commercial banks operating in Ghana to
32

However, some stakeholders have pointed out that
banks in Ghana do not have the capacity to
undertake big ticket transactions like the cocoa
syndication loan, and port expansion projects in
the country, hence must merge.

Speaking to Citi Business News, Nana Otuo
Acheampong maintained that more banks coming into
the industry will provide Ghanaians an opportunity
to choose the best.

“Well as we say in our parlance more meat
doesn’t spoil the soup. The only issue is they
are coming into the market which we all know needs
bigger tickets banks or with adequate
capitalization,” he said.

“So we welcome the addition but we hope that
going forward there will be some consolidation in
the process,” he added.

Reacting to the issue of whether the central bank
should put a hold on new licenses, Nana Otuo
Acheampong rebut that Ghana is a free economy,
therefore the Bank of Ghana cannot refuse to
license any group or individual that meets all the
criteria set for a universal bank license.

He stated that, raising of the minimum capital
requirement from the current 120 million Ghana
cedis will not stop new entrants or push existing
ones out of business.

“Its a free economy so if somebody comes up with
a good business proposal which is feasible then I
don’t see why the central bank will hold back on
giving the license. I know that recently the
central bank raised the minimum capital
requirement,” he said.

“So even if you double it to 240 million cedis
am sure those who have the money will still come
because banking is a profitable business,” he
added.

According to him, the number of banks in the
country is good for an economy with an unbanked
population of almost 80% of the country’s adult
population.

On the issue of local banks being able to
participate in what is term as the big ticketing
transaction, Nana Otuo Acheampong said Ghanaian
owned banks must consider consolidating to enable
them take part in big ticket transactions.

“Is of concern to have a lot more universal
banks that cannot be part of funding multimillion
dollar transactions and so going forward we hope
that the locally controlled banks will be able to
consolidate and take part in transactions seen to
need huge funding,” he suggested.

The three new banks include Union Savings and
Loans to now be called Omni bank, Premium bank and
Sovereign bank which has already began
operations.

Source - citifmonline.com

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