Banks are financial intermediaries that accept deposits from surplus spending units and channel these in the form of loan products to deficit spending units in the economy.
The business of banking in Ghana begun in the then Gold Coast during the colonial era with the aim of providing financial services to the British enterprises and the colonial administration.
Immediately after independence in 1957, the Bank of Ghana was established to take control over the management of the country’s currency. By 1974, many state-owned banks and Development Financial Institutions (DFI) had also been set up to enhance the financial sector by providing services, otherwise ignored by the commercial banks. Examples included the National Investment Bank, Agricultural Development Bank, Bank for Housing and Construction, Merchant Bank, the Social Security Bank.
The introduction of the new Banking Act in 2004 also led to the elimination of secondary reserves and adjustments in the minimum capital. The minimum capital was initially increased to GHS 60 million in 2007 and then in 2013 it was increased to GHS 120 million. The new Act also saw the introduction of the Universal banking license, which allows banking to provide various forms of banking services.
The Bank of Ghana sets the capital adequacy requirements for banks from periodically, with regard to the risk exposure and vulnerability of the financial system. Banks are required to be adequately capitalized.
On 11 September 2017, the Bank of Ghana revised the minimum paid-up capital for existing banks and new entrants from 120 million to 400 million cedis. Existing banks had until 31 December 2018 to comply with this new capital requirement.
How to obtain a license to operate a bank in Ghana
The law that governs the procedure and the statutory requirement for obtaining a banking license in Ghana is the Banking Act, 2004 (ACT 673). Under the Ghanaian laws, a bank must be incorporated and given a certificate of incorporation before it starts operation. If the bank deals with foreign investment, the bank must be registered under the Ghana Investment Promotion Centre Act.
Procedure for Applying for a bank License
The application for a banking license shall be made in writing to the Bank of Ghana to carry on the business of banking.
The application must indicate the type of banking license the applicant is seeking (i.e.) whether general banking license (class one and two), class one banking license (universal banks, that is all the traditional banks in Ghana) or class two banking license (offshore banking).
The application must be accompanied with a certified true copy of the Regulations, the names, addresses, and occupations of persons including their corporate affiliations who will hold significant shareholdings, directly or indirectly, in the proposed banking business, the particulars of the directors concerned with the management of the banking business, the feasibility reports including a business plan and financial projections for the first five years and areas of specialization intended, and documentary evidence of the capital, their sources and other sources of funds.
After the application, Bank of Ghana may or may not interview the promoters of the Bank or the senior managers of the proposed bank.
The Bank of Ghana may go ahead and grant the application upon being satisfied with some conditions by issuing a provisional approval for a specified license for the applicant on the terms the Bank of Ghana considers appropriate.
The Bank of Ghana may issue to the applicant the final approval and a license of a specified type to carry on banking business after the bank is satisfied with the organizational and infrastructural arrangement made by the applicant as well the applicant’s ability to carry on with all the terms and conditions stipulated in the provisional approval. The license given to the applicant cannot be transferred or assigned without prior approval of the Bank of Ghana.
The Bank of Ghana may refuse an application for banking license when the Bank of Ghana is not certified with the merits of the application. A person whose application is refused may petition the Minister of Finance in writing within ten (10) days.
Ultimately an applicant must meet the minimum capital requirement of 400 million cedis.
Basic functions of commercial banks in Ghana
In every economy, there are several kinds of banks. The commercial banks are the most common as they provide most of the services required by everyone in society. Making a choice of what bank mostly depends on preference based on how efficient these services are.
The functions below are the general services provided by the different commercial banks in Ghana.
- They provide individuals with the most reliable way of safeguarding their money. This allows customers to deposit money in their care and they can come to withdraw anytime they desire. ,
- Customers enjoy lending services from these banks. The [ending services take different forms, either cash or documents such as guarantee papers or letters of credit. 3. Trading Forex.
- Selling and buying of securities.
- Clearing of checks on behalf of their customers.
- Money transfer and other special services.
- Aid their clients with respect to the payment of bills. These bills include payment for light, water, phone, and cable television.
Banking in Ghana: These are the License Banks in Ghana
Access Bank Ghana Limited
Barclays Bank Ghana Limited
CAL Bank Limited
Consolidated Bank
Ecobank Ghana Limited
FBNBank Ghana Limited
Fidelity Bank Limited
First National Bank Ghana Limited (FNB)
Republic Bank Ghana Limited
GCB Bank Limited
Guaranty Trust Bank Ghana Limited (GTBank)
Society Generale Ghana Limited
Stanbic Bank Ghana Limited
Standard Chartered Bank Ghana
United Bank for Africa Ghana Limited (UBA)
Zenith Bank Ghana Limited
ADB Bank
National Investment Bank (NIB)
Prudential Bank
Universal Merchant Bank Limited (UMB)
OmniBSIC Bank
First Atlantic Bank Limited
Banking in Ghana: This is how much you will need to open a bank account in Ghana
A survey of Bank Charges conducted by the Bank of Ghana has shown the cost of opening a savings account with the all the 23 banks in Ghana.
The data has it that 3 banks – Zenith, Standard Chartered and Societe General require that a new customer makes an initial deposit of GHC100 to open a savings account.
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Whereas, ADB, Bank of Africa, Barclays, Consolidated, Fidelity, Republic, Stanbic, Universal Merchant Bank takes GHS50 as initial deposit for a savings accounts, GCB and Ecobank takes GHS80 and GHS30 respectively.
According to the data, First National Bank, FBN, First Atlantic, NIB, Prudential, UBA takes GHS20 as the initial deposit for a savings account.
Out of the 23 banks, only GT Bank requires a GHS0 initial deposit to open an account.
Banking in Ghana: Best customers service banks in Ghana
A survey conducted by the Ghana Customer Service Index (GCSI) in Ghana has shown bank that offer the best customer service in the banking industry.
Findings of the 2019 survey revealed that Access Bank Ghana was ranked first in the financial sector.
Stanbic Bank emerged second while Zenith Bank and Fidelity Bank were ranked third and fourth respectively.
Ecobank was fifth while Agriculture Development Bank and GCB Bank were sixth and seventh respectively.
Ownership of Banks in Ghana and number of branches
