BoG introduces fast cheque clearing system (Business Page) June 10, 2008

Story:Michael Donkor

THE Bank of Ghana (BoG) will by the end of this month introduce a system of codeline truncation to facilitate the quick clearing of cheques.
It will also introduce an automated clearing house (ACH) for the clearing of electronic debits and credits by the same period.
The Governor of the BoG, Dr Paul Acquah, announced this when he launched the Ghana Banking Survey 2008 results in Accra yesterday.
The survey was conducted by PricewaterHouseCoopers and the Ghana Association of Bankers,and covered all the banks in the country.
On the theme: “Raising the Bar: increase in the minimum capital requirements and implications for the industry,” the annual survey seeks to assess the current performance of the banking industry as an important component of the economy, and project trends in the coming years.
Dr Acquah challenged commercial banks to raise their capital base to meet the opportunities and challenges that had come along with reforms in the industry.
He said if that was done, the economy would grow at an accelerated pace and the standards of living of the people would rise while the country advanced towards a middle income status.
The BoG last year prepared a discussion document asking banks to increase their minimum capital from GH¢7 million to GH¢60 million by 2012, in view of the sophistication of the financial system, the ever growing local economy and the fact that local banks should be able to compete internationally.
Dr Acquah noted that the economy was becoming increasingly complex, and that high value financial transactions were likely to occur in the future.
He has therefore urged commercial banks to inject capital into the industry to build the capacity so as to financing bigger projects as well as volumes of trade without posing risks to financial stability.
Dr Acquah said the range of financial services had broadened with innovation, which had become a characteristic of the industry.
He said the potential for expanding loan portfolios and providing sophisticated financial services was constrained by a bank’s capital.
He said total shareholders’ funds stood at approximately Gh$870 million at the beginning of this year for all the 25 banks.
Dr Acquah said this figure could be compared with the annual syndicated short-term loan of some $800 million raised on the international capital market for the purchase of cocoa.
He said from the perspective of the BOG as a regulator, the growing sophistication of the banking system required that they introduced risk-based supervision along with an electronic reporting system to reinforce the macro-prudential anchor.
He gave the assurance that the BoG would continue to pursue policies and programmes aimed at developing a vibrant financial system capable of harnessing financial resources for the development and growth of the economy.
He said the BoG appreciated the healthy working relationship that existed between the BoG, banks and other stakeholders.
He expressed the hope that the co-operation would be deepened to enhance performance of the banking industry by using the new bar set by the increase in the regulatory capital as a pivot and a historic benchmark for the growth of the industry.
A partner of the Advisory Services at PricewaterHouseCoopers (PWC), Mr Vish Ashiagbor, who presented a synopsis of the report said the survey which was conducted annually focused on analysis of financial performance using information reported by the banks.
He said at the end of the survey, although the price of crude oil shot up, the economy stayed on course.
Mr Ashiagbor said the banking industry had reached a stage where survival was strictly tied to creativity and ability to grab opportunities.
He said any slip ups would be heavily punished by the market, while “creativity and hard eye for opportunities” will be rewarded.
Mr Ashiagbor said the industry grew, and deposits as well as credit followed suit.
He said it was also realised that as competition intensified, margins squeezed and portfolio management improved.
The PWC Partner said the banking industry was making significant progress with most of the growth indicators on the ascendancy.