The bank of Ghana is the financial sector regulatory body in Ghana that is responsible for setting the minimum capital requirement for commercial banks in Ghana.
The establishment of minimum capital for financial institutions is to ensure that the asset of customers is safe even if the bank is liquidated in the process of taking a risk.
In simple terms, any bank in Ghana that is still operating has met the minimum capital threshold of the country and hence possesses the license to accept deposits as well as investments.
For an investor, shareholder, or depositor, you should know the minimum capital standing of that bank you work with so that you don’t find yourself wanting in the future.
What Is Minimum Capital?
The term is used mostly in corporate law and banking. It is often understood by those who actually need its understanding and that does not include customers.
However, it is important to know at least briefly about it so that is exactly what this article seeks to do to the ordinary customer of the bank.
According to Wikipedia, the term minimum capital is a concept used in corporate law and banking regulation to stipulate the least assets the organization must hold.
The purpose of minimum capital in corporate law is to ensure that in the event of insolvency or financial instability, the corporation has a sufficient equity base to satisfy the claims of creditors.
What Is The Minimum Capital Requirement For Commercial Banks In Ghana?
Now we have the concept of minimum capital in our hands so we can easily understand what the minimum capital requirement for commercial banks in Ghana is all about.
According to the Bank of Ghana on this topic, every bank must be in compliance in order to remain in business. It is because of this that there was the financial sector clean-up in 2018 which saw some banks downgrading to savings and loans status.
At present in 2022, the minimum capital requirement for commercial banks in Ghana stands at GHC400 million (four hundred million Ghana Cedis).