The Bank of Ghana (BoG) has warned banks in the country to stop sourcing for expensive wholesale funds from the markets.

Maxwell David Ekow Ribeiro, Assistant Director of the Banking Supervision Department of BoG, gave the warning in a statement at the launch of Barclays Bank’s new ultramodern branch at Osu on Friday in Accra.

He disclosed that instead of mobilizing reasonable priced deposits from ordinary savers, banks in the country were clamoring for expensive wholesale funds from markets which ask them to bid for their funds.”

He said “mobilization of wholesale funds at interest rates even higher than the ordinary Treasury Bills rate raises cost of funds and eventually results in high lending rates.”

According to Mr. Ekow Ribeiro,“The high intermediation costs ultimately result in high non-performing loans, which erode capital and can lead to financial distress in institutions.”

He urged banks and other deposit taking institutions to be mindful of the development and devise appropriate means to mobilize cheaper retail deposits.”

Security of deposits He commended banks for making significant investments in providing comfortable edifices, technology and other infrastructure to enhance the delivery of services to customers.

“As these investments are being made, it is worthy to caution banks and other deposit-taking institutions to ensure that depositors’ funds are secure.

He further appealed to banks to continuously comply with BoG’s rules on the maintenance and operation of foreign exchange accounts and foreign currency accounts, repatriation of export proceeds and transfer of foreign exchange outside the country.

The Managing Director of Barclays Bank Ghana Limited, Patience Akyianu, for her part, indicated that the new ultra-modern branch had been fitted with technologically advanced systems as well as self-service facilities to make banking convenient for customers.

She said the branch has a queue management system, an integrated Premier Lounge and a Prestige Banking Centre.

“As a flagship branch, the exterior and internal layout, ambience and configuration are very much different from the former look and feel of our branches,” she indicated.

She indicated that “the Self Service Banking Zone operates 24 hours and has three ATMs, in addition to two internet booths that allow customers to check their account balances and details online.