The Bank of Ghana (BoG) has directed Banks and SDIs to desist from the payment of facilitation and business development fees or any other fees to mobilise deposits.

The central bank says any institution which fails to comply with the directive shall be severely sanctioned.

The BoG, in a statement, noted that it “observed, during the banking industry clean-up exercise, a practice whereby facilitation/business development fees or some other payments are made to agents who assist in the mobilisation of wholesale deposits, particularly from the public sector.”

The statement said the practice had the tendency to increase the “cost of funds” of institutions, which invariably was passed on to customers through high lending rates.

The BoG said Section 16 (1) (f) of the Banks and Specialised Deposit-Taking Act, 2016 (Act 930) gives it the authority to revoke the licence of any institution which, in the judgement of the central bank, is deemed to be engaged in unsafe or unsound banking practices, and, therefore, banks and SDIs should desist from that act.