The Bank of Ghana (BoG) has cautioned commercial banks in the country to avoid what it termed as the “predatory behaviors” that are motivated by profit.
It noted that any rush to introduce “exotic” products and services in a bid to grow the bottom line can be problematic adding that “such actions also has the tendency to expose the resources of the depositors and creditors at undue risk and subsequently plunge the wider financial systems into crisis.”
The Advisor to the Governor of the Bank of Ghana, Mr Nicholas Okoe Sai, gave the caution at the opening of the Westland Branch of Standard Chartered Bank in Accra last Thursday.
The new branch is the third by the bank in four months and forms part of the bank’s quest to meet its target of six branches in strategic selling points in the country by the close of the year.
“The subject of the global financial crisis has been sufficiently flogged but some lessons remain to be learnt because the “root cause of the crisis was bad governance and a drift away from sound traditional banking practices”, he said.
Mr Sai said a bank’s primary role is the mobilisation of financial savings and their deployment in appropriate credit and other products and services to support economic growth and development.
“This process requires putting in place the appropriate systems and structures to ensure that the risks entailed are understood and properly managed”, he said.
In Ghana there are 27 banks in operations serving a population of approximately 24 million people. Almost all of them are heavily populated in the major urban centers, leaving the less developed towns and cities.
Each is offering many products and services intended to attract more customers. However this practice has led to heavy impairments averaging 13.5 per cent on their balance sheets.
Mr Sai said the recent UBS debacle in London has lessons for the country’s fledging banking system and noted that “we at the central bank will continue to refine our regulatory and supervisory framework to ensure that we protect our banking system from all ills”.
He again asked commercial banks in the country to tighten their systems to prevent money launders and terrorists financiers from having a field day through them.
Mr Sai said after Ghana was removed from the blacklist but from the blacklist of the Financial Action Task Force (FATF), there is the need for measures to ensure that the country’s banks is free from such criminal activities.
An international money-laundering watchdog called Financial Action Task Force has added Ghana to its blacklist of countries that fail to meet international standards.
Ghana has been blacklisted alongside Tanzania, Thailand, Pakistan and Indonesia.
He said after the FATF notified the country of its shortfalls, measures were quickly put in place with the collaboration of the government and coordinated by the Financial Intelligence Unit and the Bank of Ghana to prevent a recurrence.
Mr Sai commended the bank for its role in ensuring the growth of the banking sector.
The Chief Executive Officer of Stanchart, Mr Kweku Bedu-Addo, said the bank was on the high alert to prevent its space from being used as for money laundering and terrorist financing.
He said the bank strictly respects the international rules and that of the country and will not compromise on them.
Subsequently, he asked customers of the bank to bear with it when questions are asked about some transactions through its system since that will be done to ensure security of the customer and the bank.
Such a move will also be in strict conformance with the country and that of the international regulations.
About the branch, he said the bank was committed to reaching out to people by bringing banking to their doorsteps.
Our strategy is to provide responsive, innovative and creative financial solutions to our customers; to many local expertise with international experience which is a winning strategy for us”, he said.
He said “a branch opening is always a very unique endeavor; it highlights the fact that the bank is moving closer to its customers; signifying the idea that it is committed to staying with its customers through thick and thin”.
Mr Bedu-Addo said by increasing the bank’s interaction points with its customers, the bank is expanding access to financial services which is a key factor for the development of the economy.
Story by Charles Benoni Okine
Source: Daily Graphic
|Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.|