Accra, May 6, GNA - Dr. Charles Mensah, Executive Director Institute of Economic Affairs, on Saturday warned that banks which did not pay adequate attention to cost control measures in their organisations would be unable to survive the current intense competition in the sector.

"Indeed, banks which do not watch their cost and adopt practical measures to control them will sink deep and lose the competition," he told guests at the Sixth banking Awards Dinner in Accra.

He said unlike the previous years where banks made easy money through the reliance on risk free instruments such as treasury bill, the current improvements in the economy, leading to lower inflation and interest rates had made the option of investing in such instruments unattractive.

"There is the general indication now that to survive the banks needed to focus more on their core functions of attracting and maintaining customers for profit."

Dr. Mensah said the positive economic developments were in the interest of the consumers of banking products, as the banks would have to offer competitive pricing in order to attract customers.

He said the fast growing competition had changed the attitude and conduct of banking business as most banks now engaged in door-to-door sale of banking products at offices in order to woo customers, a development, he said, was absent in the past.

"These are new developments that we can build on to engender growth and allow customers enjoy lower rates."

In the face of these positive developments brought about by competition, Dr Mensah urged the Bank of Ghana not to pay heed to calls from some big banks to ensure consolidation of banks through a raise in the adequacy requirements.

He said it was important not to heed such advice in order to meet the diverse needs of businesses as well as avoid a situation where banks could become cartels and influence business decisions and work against the interest of consumers. Mr. Afotey Odarteifio, Executive Secretary, Corporate Initiative Ghana, said the Ghana Banking Awards had helped in the past six years to advance the level of competitiveness in the banking industry.

The Ghana Banking Awards started in 2001 as an initiative of some 20 blue chip companies, whose aim is to work for the facilitation of an improved financial services environment in Ghana.

Twenty-one out of the 23 banks contested for the 2006 awards. The awards were in 14 categories with the highest being the Bank of the Year Award.

Ecobank Ghana Limited won the 2006 Bank of the year award. But the toast of the evening was Merchant Bank Ghana Limited, which swept five awards in the categories of Retail banking, Advisory Services, Competitive Pricing, Long-term loan financing as well as the Short-term loan financing. Other award winners were Unibank, which won three awards, Standard Chartered Bank and Barclays Bank Ghana Limited. The 2006 Awards was held on the theme: "Banking in Ghana, the past 50 years - Challenges and Prospects."