There is the need for commercial laws and practices, for instance, dealing with treatment of loan defaulters, to be reviewed to ensure that clients do not take advantage of existing practices to abuse the protection offered by the commercial laws, the Chief Executive Officer (CEO) of The Royal Bank, Mr Robert Ekow Bentil, has advised.
“There will also be the need for greater and a more broader consultation with industry players and practitioners in respect of the introduction of new Bank of Ghana (BoG) directives which sometimes have far-reaching consequences than can be anticipated beforehand”, he said.
Mr Bentil gave the advice in an interview with the Daily Graphic in Accra regarding some reforms required within the banking sector to make it more vibrant.
“The banking regulations in Ghana generally conform to international best practices and standards. However, circumstances within the banking industry have changed but the laws have not changed”, he said.
It was against this background that Mr Bentil stressed the need for the review of some of the laws to meet our current day needs.
He also noted that the sector was faced with the challenge of efficient implementation and monitoring of existing laws.
Number of banks
Responding to a question on the number of banks in the country, The Royal Bank CEO said “The need for banking services in any economy depends to some extent on the level of economic activity, the growth potential of the economy, the educational sophistication of the general populace, population demographics, and the economic capacity of the general population.”
He said all these variables were changing in favour of increased banking services to the Ghanaian population.
“To the extent that there still remains a large section of the population who are unbanked, there would always be room for another bank or for existing banks to expand.”
“If mergers and acquisitions would make banks more efficient in providing the financial services that clients require then the industry needs them.
“Mergers and acquisitions should be a result of the strategic decisions of banks based on required structural reforms, and not just happen because either the regulator or industry watchers think there are too many banks”, he said.
Bank’s focus
On the focus of the bank, he said the business focus of The Royal Bank included mining and construction, commerce, agro-processing, oil, energy, telecommunications, service, and hospitality.
“Our exposure to the oil and gas sectors of the economy remains within limits that we consider very manageable,” he explained.
He said being a new bank with a relatively smaller size did not allow it to engage in the upstream oil and gas production and refinery.
“Thus, we are confined by size to supporting the downstream section, by financing the activities of the Oil Marketing companies (OMCs)”, he said.
Source: Daily Graphic
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