Dr Henry Kofi Wampah, Central Bank Governor, has announced strings of pertinent policy guidelines intended to reform the banking sector.
The policy guidelines would further help strengthen the financial and non-financial institutions to perform efficiently and to sufficiently support economic growth.
Dr Wampah made this known at the climax of the Chartered Institute of Bankers annual dinner on Saturday to fraternise, network and confer fellowship on new members.
He said the Central Bank would take action against institutions that had had persistently low capital and to merge the undercapitalised but viable ones with stronger institutions.
Dr Wampah said outsourcing guidelines and corporate governance regulations had already been exposed to the banking industry to ensure accountability.
He explained that corporate governance practice underpinned investor confidence, stock market growth and would provide for strong risk management and internal audit systems in banks.
It would also place limits on tenures and age for directors as well as chief executive officers.
The Governor said the practice would further require banks to make additional disclosures under the Corporate Governance section of the annual reports and thus ensure those charged with governance became more accountable.
He disclosed that the Bank of Ghana (BoG) had developed a supervisory intervention guide to manage problem banks.
The objective of the guide is to provide a consistent and transparent framework for intervening in the operations of regulated deposit-taking financial institutions aimed at protecting interests of depositors and shareholders, said the Governor.
He said the Banking Act, 2004, (Act 673) was being revised to establish a framework for undertaking consolidated supervision of banks, banking groups and bank solution mechanisms which had not been adequately addressed in the Banking Act.
He added that the revision of the act would re-classify non-banking institutions and finance houses as Special Deposit-Taking Institutions with comprehensive provision for their regulation.
Dr Wampah said a base rate model was under consideration to ensure some form of uniformity and transparency when setting it.
He said the model provides an opportunity to begin to build consensus on the relevant factors that should inform interest rate setting in the economy and “I admonish all banks to adopt it and let us work with it, while addressing the challenges along the way”.
He announced the introduction of a deposit insurance scheme which was expected to become operational by the end of December 2014.
The scheme is to instil confidence and protect depositors, especially small depositors.
The Governor said the BoG had put in place steps to mitigate the risks in microfinance.
The Central Bank has established an online foreign exchange trade tracking system aimed at enhancing transparency, providing price discovery among market participants, and a daily reference foreign exchange rate for the cedi against the major trading currencies, said Dr Wampah.
He added that the system, to be implemented in 2014, would track the interbank, corporate and retail foreign exchange transactions to provide real time foreign exchange transactions effective intervention.
Dr Wampah said economic conditions had remained challenging in 2013, however, there were prospects for a turnaround as the BoG would implement appropriate policy measures to tackle the situation.