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Instant Pay: A Game-Changer for Ghana’s Banking Industry

Accra, Ghana - The rise of Instant Pay in Ghana has brought about significant changes in the way people conduct financial transactions. With Instant Pay, individuals can transfer funds from their bank accounts to mobile money wallets and vice versa, making it easier to access and manage their finances.

Regulatory Challenges

However, with these advances come regulatory challenges that need to be addressed. The Banking Industry is required to comply with various regulations, including:

Liquidity Compliance

  • Banks are required to maintain a minimum reserve of 9% of their weighted average deposit with the Bank of Ghana.
  • Failure to meet this threshold can result in penalties for non-compliance.

Anti-Money Laundering Compliance

  • Financial institutions must report suspicious transactions and flag issues of money laundering to the relevant authorities.
  • The Financial Intelligence Centre and the Economic and Organised Crime Office provide support to the banking industry for AML compliance.

Registration of Charges

  • Banks are required to register charges, securities or collaterals provided by customers within 28 days with the Collateral Registry or the Companies Registry.
  • Failure to comply can render collateral provided by customers invalid.

Asset Quality

  • Poor asset quality has been a major cause of bank failures in Ghana.
  • Banks must ensure that they have strong credit risk management systems in place and maintain high-quality investment and loan portfolios.

Experienced Management Team

  • The caliber of some bank officials in Ghana has raised concerns, leading to the introduction of fit and proper guidelines by the Bank of Ghana.

Capital Adequacy Requirements

  • Banks must comply with capital adequacy requirements, which can be challenging, especially for those with high levels of non-performing loans and related party transactions.

Consumer Protection

The Banking Industry is subject to consumer protection rules, aimed at ensuring that the interests of bank customers are adequately protected. The Bank of Ghana has issued guidelines for financial service providers, including:

  • Banks
  • Non-banking institutions
  • Mobile money operators

Future Changes

The legal and regulatory policy landscape in Ghana is expected to evolve over the next few years. New legislation may be introduced to regulate digital financial services, cryptocurrencies, and cyber security. The Bank of Ghana will continue to play a key role in ensuring that the banking industry operates in a safe and sound manner.

Date: February 2020