The Bank of Ghana’s decision to suspend Consolidated Bank Ghana (CBG)’s Foreign Exchange Trading Licence is a strong step toward regulatory compliance, but an administrative monetary penalty could have been a more effective response.

The Bank cites deficiencies in CBG’s adherence to its guidelines, specifically for Inward Remittance Services for Payment Service Providers (issued November 2023) and the Anti-Money Laundering/Combating the Financing of Terrorism & Proliferation of Weapons of Mass Destruction guidelines (issued December 2022). While the Bank of Ghana (BOG) has the authority to suspend licenses, this action carries broad implications, affecting not only the institutions involved but also their clients and the wider economy.

As such, license suspension should ideally be a last resort. Administrative penalties, in contrast, would enforce compliance while contributing additional revenue to the government.

The Foreign Exchange Act 2006 (Act 723), Section 11, currently permits the Bank to suspend or revoke a license if the licensee has violated relevant provisions. It states:

"The Bank may suspend or revoke a license issued under this Act where the licensee has contravened the provisions of this Act or Regulations made under it."

"The Bank may suspend a Licence for a specific period or determine conditions or restrictions for the licence instead of revoking the licence."

For clarity and best practice, this section should be amended to explicitly outline the progressive stages of non-compliance, including administrative penalties, with license suspension as a last measure.

Furthermore, BOG should consider detailing specific deficiencies in its notices, enabling other institutions to proactively address similar compliance issues.