The move is in line with the Bank of Ghana’s (BoG) directive to the banks to recapitalise.

The Managing Director of the ARB Apex Bank, Mr Kojo Mattah, has, therefore, asked the general public and customers of the 144 banks to remain calm as they went through the processes to comply with the central bank directive.

He told the GRAPHIC BUSINESS on August 20 that beyond helping individual banks to recapitalise, the ARB Apex Bank was also providing professional advice to banks that were voluntarily going through merger processes.

“There is nothing wrong with banks talking about merger; it brings efficiency and takes out unnecessary competition although we say competition is good,” he said.

“We think that if you can merge, then it will improve efficiency,” he said.

New recapitalisation deadline

Mr Mattah was speaking to the paper on a fresh directive from the central bank to RCBs and microfinance institutions to recapitalise to GH¢1 million and GH¢2 million respectively by February 28 next year.

The directive was contained in a notice issued on August 19.

The February 2020 deadline for recapitalisation replaced an earlier one – December 31, 2017 – which elapsed with most of the institutions being unable to comply.

The earlier directive, which was issued in 2015, had asked the institutions to stagger their capital raising.

The August 19, 2019 directive, which was signed by BoG's Secretary, Mrs Frances Van-Hein Sackey, warned that RCBs and MFIs that failed to comply with the new deadline would be sanctioned in accordance with the Banks and Specialised Deposit-Taking Institutions Act (BSDI), 2016 (Act 930).

It also asked shareholders, directors and operators of RCBs and MFIs to take note and be guided accordingly.

Clean-up exercise on RCBs

The directive from BoG followed the completion of a far-reaching clean-up exercise that lasted a year and saw almost half a million institutions go under.

The final lap of the exercise was done on August 16, when 23 licences of savings and loans companies, finance houses and non-bank financial institutions were revoked and their assets and liabilities transferred to a receiver.

Started in August 2017, the exercise touched all segments of the deposit-taking institution business except the RCBs.

From banks through microcredit institutions to non-bank financial institutions, the licences of operators whose actions were found to have contravened aspects of the BSDI Act 930 and, therefore, injurious to the health of the financial sector in the eyes of BoG were revoked and their liabilities and performing assets either merged into majority state-owned lender GCB Bank Limited or newly established Consolidated Bank Ghana Limited (CBG) or transferred to a Receiver, Mr Eric Nana Nipah, for dissolution.

In an August 16, 2019 press statement to announce the revocation of the licences of 25 institutions and the completion of the exercise, BoG said it would work with the ARB Apex Bank to make RCBs stronger “to enable them to better support rural economic development”.