Only 16 banks have so far met the Bank of Ghana’s minimum capital requirement of GH¢60 million as at the end of November 2011, Governor Paa Kwesi Amissah-Arthur has confirmed.

With the exception of Sahel Sahara Bank and Bank of Baroda, which were given some time to shore up their capital because they started operations in 2007 and 2008 respectively, all the other 13 foreign banks have met the minimum capital requirement.

With regard to the indigenous banks, Ghana Commercial Bank (GCB), Agriculture Development Bank, Merchant, Fidelity and The Trust Bank which has been acquired by Ecobank Ghana, have met the mandatory operation requirement.

Mr. Amissah Arthur, responding to a question during a Monetary Policy Committee (MPC) conference, said the Central Bank would not give reprieve to any bank that failed to shore up its capital to GH¢60 million. This meant that recalcitrant banks would see their licences being revoked while they would be converted to non-bank financial institutions.

He therefore urged the local banks which were yet to recapitalize to invite more shareholders by listing on the Ghana Stock Exchange (GSE).

“At the initial stage, banks will be required to list just enough shares to raise the funds required to close the capital gap, subject to meeting the GSE’s minimum floatation threshold of 25 percent of the bank’s equity.”

He also reminded the banks of his directive during the dinner dance of the Chartered Institute of Banking.

The BoG Governor encouraged mergers and acquisitions in the banking industry, saying there was the need for such moves in order for the banks to undertake big ticket deals.

He added that Ghanaian banks had not done well in the area of syndication which he believed was the best way to go when there were huge projects to be underwritten.

Meanwhile, the banking system continues to show steady growth in assets and profitability, although at a relatively slower pace than a year ago.

Non-performing loans however continued to remain high, although it declined from 16.9 percent in October 2010 to 15.3 percent in October 2011.

There was also net easing of credit to the private sector as credit to the sector grew steadily. In real terms, credit flow to the private sector recorded an annual growth of 16.9 per cent, compared to a decline of 0.2 per cent a year earlier.

By the end of October 2011, it increased by GH¢1.7 billion, on a year-on-year basis to GH¢7.9 billion.