Ghana’s central bank, the Bank of Ghana, is tightening its grip on the country’s foreign exchange market. In a move aimed at curbing irregularities, the bank suspended the foreign exchange licenses of two major players – Guaranty Trust Bank (GT Bank) and FBN Bank – for a period of one month, effective March 18th, 2024. This action comes just three months after the bank barred eight money transfer organizations (MTOs) from operating without proper regulatory approval.
The suspension of GT Bank and FBN Bank’s forex licenses stems from their alleged breaches of foreign exchange market regulations. According to a statement issued by the Bank of Ghana, these breaches included the use of fraudulent documentation in their foreign exchange transactions. This raises concerns about potential manipulation or attempts to circumvent established currency exchange protocols.
Guaranty Trust Bank, in response to the suspension, has indicated its cooperation with the central bank. They have stated their intention to “swiftly address the trade-related issues leading to the suspension.” This suggests that the bank acknowledges the concerns raised by the Bank of Ghana and is committed to working towards a resolution. Additionally, GT Bank has assured its customers that all other aspects of their business operations remain unaffected, with the suspension limited solely to their foreign exchange activities.
The Bank of Ghana’s actions reflect their authority under the Foreign Exchange Act of 2006. Section 11 (2) of this act empowers the bank to suspend licenses for a set period rather than resorting to permanent revocation. This approach allows for corrective measures to be implemented while still sending a strong message about the importance of adhering to regulations.
The central bank has made it clear that the one-month suspension for GT Bank and FBN Bank is conditional. Their licenses will be reinstated only after the Bank of Ghana is satisfied that the banks have implemented “effective controls” to ensure future compliance with foreign exchange market regulations. This serves as a warning to all financial institutions operating within Ghana, highlighting the central bank’s commitment to maintaining a stable and transparent foreign exchange market.
The recent actions by the Bank of Ghana underscore its determination to regulate the foreign exchange market effectively. By cracking down on irregularities and demanding stricter adherence to guidelines, the bank aims to foster a more secure and predictable environment for all participants in the market. This can have positive implications for businesses and individuals alike, promoting greater confidence and stability in foreign exchange transactions.
Source: PunchNg