- What is the financial health of the banking industry?
- How are banks regulated in Ghana?
- What should I know about opening a bank account in Ghana?
- Do the requirements to open an account vary by bank?
- Which banks can most easily facilitate transfers from abroad?
- Can I repatriate my money when I leave Ghana?
- What factors should I consider in selecting a bank?
- What expectations should I consider with respect to Ghana banking?
- Industry Health
Ghana’s banking and finance industry is generally very healthy. There are currently 28 private banks operating in Ghana. Bank of Ghana is the government-run body that provides regulatory oversight for the industry. Under Bank of Ghana, the industry’s major players include:
- Ghana Commercial Bank – with an operating budget of about $1.8 billion
- Barclays Bank – with an operating budget of about $1.3 billion
- Standard Chartered Bank – with an operating budget of about $1.3 billion
- Ecobank – with an operating budget under $1.3 billion
- Stanbic Bank – with an operating budget under $1.3 billion.
Average bank base lending rates remain above 25% even though the central bank rate has dropped to about half that rate. This is a reflection of non-performing loans in the upper teens. Ghana lacks the types of structured systems that make it possible for banks to track borrowers’ identification and credit history and this makes it difficult to verify the legitimacy of transactions, minimize fraud and track down customers that have defaulted on payments. Corruption in various sectors is also felt to contribute to non-performing loans.
The Central Bank (Bank of Ghana) has the autonomy and responsibility of managing the country’s monetary policy. It also advises the government on implementation of the monetary policies. It regulates the banking and financial sector with a view of enhancing the enforcement of prudential rules.
There are several different types of bank accounts. Opening a bank account in Ghana is fairly simple. You fill out a form and provide the necessary evidence to confirm your identity. Document requirements for business accounts include, but are not limited to:
- License of incorporation
- ID of all board members
- Physical address of all members of the organization
- Physical address of all members of the board
- Names of references as support for you application
- There are several different types of bank accounts
Some banks have additional requirements for foreign entities so verify before attempting to open.
These are the normal current accounts known widely everywhere. You are issued a check book and a VISA card.
- With the Treasury Bills, the Bank acts as an intermediary and purchases government securities on behalf of customers.
- Government Bonds purchased are another form of security and such investments may be retired or rolled over on the date of maturity, depending on what the customer wants.
- With the 91 and 182-day bills, interest can be discounted up front and the bill again rediscounted before maturity (i.e. it can be redeemed before maturity).
- These are accounts mostly operated by corporations who want to benefit from interest incomes on their deposits while enjoying flexibility at the same time. They enable the customer to withdraw any amount of money at any time without prior notice to the Bank.
- Interest rates on these deposits are mostly negotiated between the customer and the Bank. Interest is calculated daily.
- To maximize the yield on one’s investment, a customer could operate both a current account and a call account in which case instructions could be given that balances above a certain threshold on the current account could be transferred to the call account so as to earn higher interest.
- In the event of the customer’s current account not being able to meet an anticipated debit, instructions could be given for a transfer from the customer’s call account to the current account to satisfy the amount.
Fixed deposit accounts
- Fixed deposit accounts ensure that idle funds that do not require immediate use are invested prudently for good returns.
- The rate of interest is negotiable depending on the amount being invested.
- The minimum invested amount is GH¢500 and may be deposited for one month, three months, six months or longer.
- Fixed Deposit Certificates could be used as collateral for a loan from the Bank.
- These are accounts that yield interest depending on the bank’s rates and the amount of money deposited into the account.
- The duration the money remains in the account also has bearing on the amount of interest you can generate overall.
- Businesses will want to have a savings account and a checking account (a checking account is often referred to as a current account in Ghana). Most banks will offer a Visa debit card with these accounts.
- Consider opening an offshore account or Dollar Account to facilitate international transactions and guard funds against inflation.
Transfers from abroad
Various banks have significant strengths and weaknesses with respect to transfer of money from abroad. Barclays has the largest reach when it comes to transfers with many connections to banks in the UK. Standard Chartered, Ecobank and GCB are experienced with overseas transfers.
It is possible for foreign entities to repatriate money upon leaving Ghana. It is a matter of proving to the Bank of Ghana that the money you came in with was used properly and that the money you are claiming is rightfully yours. The Bank of Ghana will have to verify what amount of money was brought in, how it was used, and how much money was made through business activities. These details must be provided by your bank so they may ask for documentation of these details. You will have to work closely with your account manager throughout this process. As long as all the correct documents are in place and you can verify your financial claims, you will be able to repatriate your money.
Selecting a Bank
The selection of a bank is an extremely important decision. The right bank for you will be dependent on your needs and matching services and financial strength. Chambers of commerce, chartered accountants and attorneys are sources of trusted advice. The ACCRA Expat - How to Change and Bank and No Worries- Bank Accounts websites may provide some considerations for your banking decision.
It is important to remember that systems in Ghana are not as efficient as systems you would encounter in the US or in the UK. They are operating under circumstances that are not optimal. This may cause frustration, especially for foreigners who expect a higher level of efficiency. It is important to understand that human error on the part of the bank or gaps in service may happen and to be patient with bank employees in such circumstances while firmly insisting that your issues are addressed. Your account manager should actively assist you in resolving issues with the bank.