This document provides an introduction to banking operations in Ghana's financial sector. It discusses the development of Ghana's financial system from pre-colonial times to the present. It outlines the key institutions that make up Ghana's financial system, including banks, non-bank financial institutions, insurance companies, and capital market operators. It also summarizes recent reforms to the banking sector undertaken in response to liquidity and solvency crises.
The document discusses the history of banking and its role in the 2007-2008 financial crisis. It provides an overview of different types of banks and their functions. It then describes various banking regulations on operations, capital requirements, and how regulators monitor banks. The document notes that banks play a central role in the financial system and that banking crises can exacerbate economic downturns. It outlines several triggers for the 2007-2008 crisis, including the growth of subprime lending and loosening of regulations, and provides a timeline of key events as the crisis unfolded.
This document proposes advisory services to help a bank group manage troubled real estate assets. It describes the current poor market conditions, challenges faced by the bank group as owners, and recommends appointing an independent advisor to better address tactical and strategic needs like research, leasing, sales, and restructuring ownership. The advisor would aim to preserve asset value and extract as much money from the properties as possible for the banks.
The document discusses India's financial system before and after liberalization. It describes the objectives to historically analyze the system, appreciate its evolution, and evaluate components in a global context. The financial system comprises financial assets/instruments, financial institutions, financial markets, and regulation. Key changes after reforms include increased bank profitability, reduced directed lending, and expansion of banking activities and services.
lThis presentation includes the historical background of steps taken to implement Islamic Financial system in Pakistan. it also highlights the current challenges, probems and solutions
This document provides an overview of the evolution and structure of the Indian banking system. It discusses the key developments since independence, including the establishment of the Reserve Bank of India in 1934 and the current two-tier structure consisting of scheduled and non-scheduled banks. The roles and functions of RBI as the central bank and banking regulator are described. The document also summarizes the major recommendations of the Narasimham Committee reports on banking sector reforms to modernize and strengthen the Indian financial system.
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MUTUAL FUND MANAGEMENT
benefit of mutual funds how to work mutual fun sector in India
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in other country
other service of Mutual Fund
mf v/s bank investment
Mutal Fund Role As a TRUSTEES
TYPES OF MUTUAL FUNDS
INVESTMENT PROCEDURE IN MUTUAL FUNDS
RIGHTS AND DUTIES OF INVESTORS
INVESTMENT DECISION MAKING IN MUTUAL FUND
NET ASSET VALUE
SEBI REGULATIONS FOR NAV CALCULATION
VALUATION
AND
VALUATION NORMS
ACCOUNTING OF MUTUAL FUNDS
FINANCIAL STATEMENT OF MUTUAL FUNDS BALANCE SHEET
DIVIDEND DISTRIBUTION TAX (DTT)
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SECTION 80 C DEDUCTION
This document provides information on factoring and forfaiting. It discusses the key functions of a factor, including financing, sales ledger administration, credit risk assessment, and consultancy. Factoring can help companies access cash flows more quickly by having a third party (the factor) manage receivables and collections. The document outlines the mechanics of a factoring transaction and compares factoring to alternatives like bill discounting. It also discusses export factoring and how it works.
The document discusses the history of banking and its role in the 2007-2008 financial crisis. It provides an overview of different types of banks and their functions. It then describes various banking regulations on operations, capital requirements, and how regulators monitor banks. The document notes that banks play a central role in the financial system and that banking crises can exacerbate economic downturns. It outlines several triggers for the 2007-2008 crisis, including the growth of subprime lending and loosening of regulations, and provides a timeline of key events as the crisis unfolded.
This document proposes advisory services to help a bank group manage troubled real estate assets. It describes the current poor market conditions, challenges faced by the bank group as owners, and recommends appointing an independent advisor to better address tactical and strategic needs like research, leasing, sales, and restructuring ownership. The advisor would aim to preserve asset value and extract as much money from the properties as possible for the banks.
The document discusses India's financial system before and after liberalization. It describes the objectives to historically analyze the system, appreciate its evolution, and evaluate components in a global context. The financial system comprises financial assets/instruments, financial institutions, financial markets, and regulation. Key changes after reforms include increased bank profitability, reduced directed lending, and expansion of banking activities and services.
lThis presentation includes the historical background of steps taken to implement Islamic Financial system in Pakistan. it also highlights the current challenges, probems and solutions
This document provides an overview of the evolution and structure of the Indian banking system. It discusses the key developments since independence, including the establishment of the Reserve Bank of India in 1934 and the current two-tier structure consisting of scheduled and non-scheduled banks. The roles and functions of RBI as the central bank and banking regulator are described. The document also summarizes the major recommendations of the Narasimham Committee reports on banking sector reforms to modernize and strengthen the Indian financial system.
Decode Government Of India 20 lakh crore stimulus package SonaliKhadaria
Decoding the 20 lakh crore stimulus package.
This initiative is taken by the government to save the country.
Brief about vision& purpose of Covid Relief package, analysis and impact of Covid relief package, intended usage and actual result of Rs 20 lakh crore Covid relief package
MUTUAL FUND MANAGEMENT
benefit of mutual funds how to work mutual fun sector in India
ORGANISATIONAL STRUCTURE OF MUTUAL FUNDS
in other country
other service of Mutual Fund
mf v/s bank investment
Mutal Fund Role As a TRUSTEES
TYPES OF MUTUAL FUNDS
INVESTMENT PROCEDURE IN MUTUAL FUNDS
RIGHTS AND DUTIES OF INVESTORS
INVESTMENT DECISION MAKING IN MUTUAL FUND
NET ASSET VALUE
SEBI REGULATIONS FOR NAV CALCULATION
VALUATION
AND
VALUATION NORMS
ACCOUNTING OF MUTUAL FUNDS
FINANCIAL STATEMENT OF MUTUAL FUNDS BALANCE SHEET
DIVIDEND DISTRIBUTION TAX (DTT)
SECURITIES TRANSACTION TAX (STT)
SECTION 80 C DEDUCTION
This document provides information on factoring and forfaiting. It discusses the key functions of a factor, including financing, sales ledger administration, credit risk assessment, and consultancy. Factoring can help companies access cash flows more quickly by having a third party (the factor) manage receivables and collections. The document outlines the mechanics of a factoring transaction and compares factoring to alternatives like bill discounting. It also discusses export factoring and how it works.
The document discusses the Narasimham Committee I and II, which were committees set up by the Government of India to analyze and reform the financial system. Narasimham Committee I was appointed in 1991 in response to the balance of payments crisis and made recommendations around reducing CRR and SLR, interest rate deregulation, and restructuring banks. Narasimham Committee II was appointed in 1998 to review implementation of banking reforms and made further recommendations around issues like bank size and capital adequacy ratios. The committees' recommendations helped strengthen India's banking system and its performance during the 2008 financial crisis.
This document summarizes the major reforms to India's financial sector in the early 1990s. It describes how prior to reforms, the sector was highly regulated and repressed through policies like administered interest rates and directed lending. This caused inefficiencies. The reforms aimed to liberalize and open up the sector to market forces through deregulation, increased competition, and development of financial markets and institutions. Key reforms included banking reforms like privatization, monetary policy reforms moving to indirect tools, and development of capital markets.
This document discusses accounting standards and financial statements. It provides definitions of accounting standards as guidelines for recording accounting transactions and financial statements as written records that convey a firm's financial performance and activities. Financial statements include balance sheets, income statements, cash flow statements, and explanatory notes. Accounting standards enhance comparability, consistency, and transparency of financial reporting. The document outlines the objectives, types, advantages, limitations, and differences between international and domestic accounting standards.
Unit 4 c) changes in policy perspectives role of institutional framework afte...Mahendra Kumar Ghadoliya
Development of Indian economy has passed from many phases. We followed the policy of Import Substitution and restrictive trade policies. we liberalized the economy gradually and slowly. After 1991 Industrial policy India followed path of Liberalization.
Municipal Accounting Reforms - Why? How? & A Case Study of IndiaRavikant Joshi
The document discusses municipal accounting reforms in India, including:
- It provides an introduction to municipal accounting reforms, which involve converting cash-based single-entry accounting systems to accrual-based double-entry systems and adopting international public sector accounting standards.
- Reforms are needed due to changing state-citizen relationships and demands for greater accountability, transparency and efficiency from citizens. They also help address changing models of financing urban development.
- India has pursued municipal accounting reforms over several decades, but implementation has been uneven, with only about 300 of over 4,000 municipalities fully adopting reformed systems. Barriers include lack of capacity and ownership at the local level.
History of Non-Banking Financial Companies Classification of Non-Banking Co...Mohammed Jasir PV
History of Non-Banking Financial Companies
Classification of Non-Banking Companies
Classification of Activities of NBFC
Fund Based Activities
Fee Based Activities
Concepts, Growth and Trends of Fee Based And Fund Based Activities.
The document discusses the history and reforms of the banking industry in India. It describes the industry's evolution through five phases: evolutionary, foundation, expansion, consolidation, and reformatory. Major reforms since the 1990s included liberalizing interest rates, reducing statutory preemptions like CRR and SLR, increasing competition through private banks and foreign banks, and improving regulation and supervision. The reforms have led to improved access to credit, more independent monetary policymaking, and greater operational freedom for banks.
Banks are financial institutions that deal with deposits and lending. They accept deposits from those who want to save money and lend money to those who need it. Banks perform two main functions: primary functions related to banking like accepting different types of deposits and granting loans, and secondary functions like providing agency services and general utilities. Primary functions allow banks to collect deposits from the public in the form of savings, fixed, current, or recurring deposits, and grant loans through overdrafts, cash credits, or different term loans in order to earn a profit from the interest rate spread.
PNC has a long history dating back to the 1800s through several mergers and acquisitions. It now serves individuals, small businesses, and corporations through various banking products and services across 19 states. Key ratios show declining profit margins but increased sales from 2010-2012. PNC faces risks from economic conditions, regulations, and competition. However, its diversified business model, geographic reach, and recent stock price increase make it a reasonable investment.
The document discusses banking regulation in Saudi Arabia, UAE, and Sudan. It outlines key objectives of regulation such as financial stability, bank soundness, and alignment with international standards. Regulation helps build public confidence and safety, and prevents excessive lending. The document then provides details on regulatory frameworks and priorities in each country, including Saudi Arabia's vision to expand Islamic finance, Sudan becoming fully Islamic banking compliant, and UAE's strategic focus on payment systems, fintech, and risk management. Overall regulation is concluded to be pivotal to industry development and sustainability.
Royal Bank of Canada (RBC) is the second largest bank in Canada by total assets. It operates domestically and internationally, with over 78,000 employees serving over 16 million clients. RBC has a diversified business model across personal and commercial banking, wealth management, insurance, investors and treasury services, and capital markets. RBC has a robust risk management structure consisting of a risk philosophy, enterprise risk management framework, risk conduct, risk appetite, risk principles, and three lines of defense governance model to oversee risk across the organization. Financial analysis shows strong and growing financial performance for RBC over the past three years.
The document provides information on creating and managing bank services outlets and setting banking technology. It discusses options for forming new banks such as chartering de novo institutions or establishing branches. The bank chartering process in the US involves approval from regulators who assess various factors like the proposed area of operations, competition, population growth, and management experience. Emerging technologies allow for branchless banking through automated teller machines, telephone and internet banking. Mobile apps and digital services are expanding banking access for customers.
2009:The New World of Banks, Governments, Regulation and Supervision – Viewpo...econsultbw
The document summarizes views from African central bankers on ongoing developments in banking regulation and supervision in Africa. It discusses the impact of global financial reforms proposed by the G20, including concerns that higher capital requirements and a more complex regulatory regime could reduce lending to Africa and make adopting Basel II more challenging. It also addresses issues around the adequacy of Africa's voice in global decision-making, challenges with implementing macro-prudential supervision, and transnational regulatory cooperation as African banking becomes more regional and cross-border.
Mallam Sanusi Lamido Sanusi presentation on the 2012 policy dialogue by Malla...MMFNG
Towards Financial System Stability: Recent Policy Reforms in the Nigerian Banking Sector - Mallam Sanusi Lamido Sanusi
Aisha Muhammed-Oyebode - CEO, Murtala Muhammed Foundation
The document provides information about South African exchange controls, including definitions of key terms, the history and purpose of exchange controls, and rules regarding emigration from South Africa. It summarizes the emigration process, which involves completing forms, providing supporting documents, and obtaining approval from the South African Revenue Service and South African Reserve Bank. It also outlines restrictions on funds held in blocked accounts and rules regarding trusts, estates, policies and assets after emigrating from South Africa.
1. A financial system consists of institutions, instruments, and markets that foster savings and channel them to their most efficient uses. It mobilizes and allocates savings, monitors corporate performance, provides payment and settlement systems, and offers diversified investment opportunities.
2. Capital formation involves diverting productive capacity toward making capital goods that increase future productivity. It requires increased savings through various means and the mobilization and investment of those savings through money and capital markets.
3. Banks play a key role in capital formation by accepting deposits and using fractional reserve banking to multiply the money supply through lending, stimulating further economic activity.
This document provides an overview of the Naya Pakistan Housing Program (NPHP) and the Mortgage Refinance Company (MRC) initiative in Pakistan. It begins with messages of support from the Prime Minister and Housing Minister. It then discusses the background and vision of NPHP, as well as the facilities offered. Next, it outlines the prudential regulations for house finance established by the State Bank of Pakistan. It also discusses SBP initiatives to promote financing under NPHP. Finally, it provides an overview of the working procedure for the MPMG housing scheme, including the financing type, eligibility criteria, application process, and role of participating banks.
Habib Bank was founded in 1941 in Bombay and is now the largest private bank in Pakistan. It has over 1700 branches domestically and 55 internationally. The bank was nationalized in 1974 but privatized in 2004. Currently, its vision is to enable prosperity for customers, excellence for staff, and value for stakeholders. The bank offers various personal and commercial products and services including deposits, loans, credit cards, and digital banking. A SWOT analysis finds strengths in its large network and reputation, while weaknesses include some outdated technologies and centralized management.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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This document summarizes the major reforms to India's financial sector in the early 1990s. It describes how prior to reforms, the sector was highly regulated and repressed through policies like administered interest rates and directed lending. This caused inefficiencies. The reforms aimed to liberalize and open up the sector to market forces through deregulation, increased competition, and development of financial markets and institutions. Key reforms included banking reforms like privatization, monetary policy reforms moving to indirect tools, and development of capital markets.
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Development of Indian economy has passed from many phases. We followed the policy of Import Substitution and restrictive trade policies. we liberalized the economy gradually and slowly. After 1991 Industrial policy India followed path of Liberalization.
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The document discusses municipal accounting reforms in India, including:
- It provides an introduction to municipal accounting reforms, which involve converting cash-based single-entry accounting systems to accrual-based double-entry systems and adopting international public sector accounting standards.
- Reforms are needed due to changing state-citizen relationships and demands for greater accountability, transparency and efficiency from citizens. They also help address changing models of financing urban development.
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History of Non-Banking Financial Companies
Classification of Non-Banking Companies
Classification of Activities of NBFC
Fund Based Activities
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The document discusses the history and reforms of the banking industry in India. It describes the industry's evolution through five phases: evolutionary, foundation, expansion, consolidation, and reformatory. Major reforms since the 1990s included liberalizing interest rates, reducing statutory preemptions like CRR and SLR, increasing competition through private banks and foreign banks, and improving regulation and supervision. The reforms have led to improved access to credit, more independent monetary policymaking, and greater operational freedom for banks.
Banks are financial institutions that deal with deposits and lending. They accept deposits from those who want to save money and lend money to those who need it. Banks perform two main functions: primary functions related to banking like accepting different types of deposits and granting loans, and secondary functions like providing agency services and general utilities. Primary functions allow banks to collect deposits from the public in the form of savings, fixed, current, or recurring deposits, and grant loans through overdrafts, cash credits, or different term loans in order to earn a profit from the interest rate spread.
PNC has a long history dating back to the 1800s through several mergers and acquisitions. It now serves individuals, small businesses, and corporations through various banking products and services across 19 states. Key ratios show declining profit margins but increased sales from 2010-2012. PNC faces risks from economic conditions, regulations, and competition. However, its diversified business model, geographic reach, and recent stock price increase make it a reasonable investment.
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Royal Bank of Canada (RBC) is the second largest bank in Canada by total assets. It operates domestically and internationally, with over 78,000 employees serving over 16 million clients. RBC has a diversified business model across personal and commercial banking, wealth management, insurance, investors and treasury services, and capital markets. RBC has a robust risk management structure consisting of a risk philosophy, enterprise risk management framework, risk conduct, risk appetite, risk principles, and three lines of defense governance model to oversee risk across the organization. Financial analysis shows strong and growing financial performance for RBC over the past three years.
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Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
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After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
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2. AGENDA
• INTRODUCTION –
• DEVELOPMENT OF THE FINANCIAL SECTOR
• STRUCTURE OF GHANAIAN FINANCIAL SYSTEM
• FINANCIAL SUB-SECTORS AND INSTITUTIONS – CLASSIFICATION
• PERMISSIBLE ACTIVITIES OF NON-BANK FINANCIAL INSTITUTIONS
• PERMISSIBLE ACTIVITIES OF BANKS & SPECIALIZED DEPOSIT-TAKING
INSTITUTIONS
• FINANCIAL MARKETS
• OVERVIEW OF REGULATION OF THE FINANCIAL SECTOR
• SUMMARY/CONCLUSION
2
3. INTRODUCTION
• THE FINANCIAL SECTOR AS A SPECIALIZED SECTOR OF THE ECONOMY THAT
DEALS WITH THE FLOW OF MONEY
• THIS SECTOR HAS EVOLVED OVER TIME AS A FACILITATOR OF MODERN DAY
CIVILIZATION
• IT SHOULD BE UNDERSTOOD IN TERMS OF THE ROLE OF MONEY.
• MONEY IS ESSENTIALLY A MEASUREMENT OF REWARD FOR EFFORT.
• SOCIETY CONSISTS OF PLAYERS PLAYING DIFFERENT ROLES AND EACH PLAYER IS
REWARDED MONEY FOR HIS EFFORT.
• OVERTIME, INDIVIDUALS AND INSTITUTIONS SPECIALIZED IN THE FLOW OF
MONEY FROM ONE PART OF THE ECONOMY TO THE OTHER –CREATING TWO
MAJOR COMPONENTS OF THE ECONOMY – THE REAL SECTOR AND THE
MONETARY SECTOR 3
4. ROLE OF THE FINANCIAL SECTOR
• THE PRIMARY ROLE OF THE FINANCIAL SECTOR IS TO FACILITATE THE FLOW OF
MONEY IN THE ECONOMY
• THE ECONOMY COMPRISES TWO MAIN SUB-COMPONENTS
• PRODUCTION OF GOODS AND SERVICES – THE REAL SECTOR
• FINANCIAL INTERMEDIATION - THE MONETARY SECTOR
• SOCIETY IS COMPOSED OF LIVING BEING WHO DESIRE GOODS AND SERVICES TO
MEET THEIR NEEDS AND DESIRES.
• TO PRODUCE TO SATISFY THESE NEEDS, PLAYERS IN THE SOCIETY MUST
PRODUCE SOMETHING SOCIETY NEEDS
• SOCIETY REWARDS THIS EFFORT WITH MONEY
4
5. INTERMEDIATION BETWEEN SURPLUS AND DEFICIT
UNITS
• PRODUCERS OF GOODS AND SERVICES NEEDS MONEY TO PROCURE
RAW MATERIALS, PEOPLE
• IT IS THE ROLE OF FINANCIAL INSTITUTIONS TO TAKE MONEY
FROM THOSE WHO HAVE SURPLUS TO THEIR NEEDS AND TRANSMIT
IT TO THOSE WHO NEED THE MONEY TO PROCURE INPUTS FOR
PRODUCTION
• OVERTIME THIS INTERMEDIARY ROLE HAS BEEN FACILITATED BY
PEOPLE LIKE GOLDSMITHS, MONEY LENDERS AND BROKERS IN
INTERNATIONAL TRADE
• IN TIME THESE INDIVIDUALS EVOLVED INTO INSTITUTIONS, WHICH
ALSO EVOLVED INTO THEIR PRESENT DAY FORMS PROVIDING ALL
SORTS OF FINANCIAL SERVICES. 5
6. COMPONENTS OF FINANCIAL SECTOR
• THE FINANCIAL SECTOR COMPRISES THE INSTITUTION AND
MARKETS THAT THE INSTITUTIONS USE TO INTERACT WITH EACH
OTHER.
• THE INSTITUTIONS LARGELY PLAY THE ROLE OF FACILITATING THE
FLOW OF MONEY THROUGH THE PRODUCTIVE SECTOR OF THE
ECONOMY
• THESE FINANCIAL INSTITUTIONS ARE LARGELY TERMED AS
INTERMEDIARIES.
• THE FINANCIAL SECTOR ALSO CONSISTS OF THE MEDIUM
THROUGH WHICH MONETARY TRANSACTIONS ARE EFFECTED,
TERMED FINANCIAL MARKETS
• FUNDS ARE CHANGED THROUGH DIFFERENT TYPES OF CONTRACTS
6
7. THE STRUCTURE OF THE GHANAIAN FINANCIAL
SERVICES SECTOR
• STRUCTURE COULD BE CONSTRUED BOTH IN TERMS OF THE
INSTITUTIONS PLAYING DIFFERENT ROLES OR IN TERMS OF THE
DIFFERENT FINANCIAL MARKETS AND INSTRUMENTS THAT ARE
TRADED IN THE MARKET
• THE FINANCIAL INSTITUTIONS REPRESENTING THE INSTITUTIONS
RESPONSIBLE FOR THE CUSTODY AND FLOW OF MONEY FROM
SURPLUS UNITS TO DEFICIT UNITS
• THE MARKETS – REPRESENTING THE ARRANGEMENT BY WHICH
FINANCIAL INSTITUTIONS, DEFICIT UNITS AND SURPLUS UNITS
COME INTO CONTACT WITH EACH OTHER
• THE FINANCIAL INSTRUMENTS – REPRESENTING THE MEANS BY
WHICH THE FLOW IS EFFECTED.
7
8. DEVELOPMENT OF THE GHANAIAN FINANCIAL
SECTOR
• THE GHANAIAN FINANCIAL SECTOR HAS GONE THROUGH AN
INTERESTING EVOLUTION FROM PRE-COLONIAL TIMES TO THE
PRESENT DAY
• IT STILL LACKS THE SOPHISTICATION FOUND IN ADVANCED
ECONOMIES
• THE FOLLOWING EVOLUTIONARY PERIODS MAY BE DELINEATED
• PRE-COLONIAL
• INDEPENDENCE UP TO THE FINANCIAL SECTOR REFORMS OF
THE LATE 1980S
• FROM THE FINANCIAL SECTOR REFORMS UP TO THE BANKING
CRISIS – PRE-COVID
• FROM THE RECENT BANKING REFORMS TO DATE
8
9. COLONIAL PERIOD
• DOMINATED BY TWO FOREIGN BANKS – BANK FOR BRITISH WEST AFRICA AND
BARCLAYS BANK DCO
• ESTABLISHED TO SERVE ENGLISH COMPANIES TRADING IN WEST AFRICA,
THOUGH LOCAL MERCHANTS BENEFITED FROM THEIR OPERATIONS
• WEST AFRICAN CURRENCY BOARD ESTABLISHED AS CURRENCY ISSUER AND
CURRENCY EXCHANGE
• NO FINANCIAL MARKETS EXISTED – ALL BUSINESS WAS OVER THE COUNTER
• THERE WERE NON NON-BANK FINANCIAL INSTITUTIONS
• IN PREPARATION FOR INDEPENDENCE BANK OF GOLD COAST ESTABLISHED IN
1953
• LATER THIS WAS SPLIT INTO A CENTRAL BANK AND A COMMERCIAL BANK, NOW
GCB 9
10. INDEPENDENCE – FIRST REPUBLIC
• CENTRAL BANK AND WHOLLY GOVERNMENT OWNED BANK IN PLACE
• MAJOR FOCUS OF GOVERNMENT AT THE TIME WAS RAPID DEVELOPMENT
• WHOLLY GOVERNMENT OWNED DEVELOPMENT BANKS LIKE AGRICULTURAL
DEVELOPMENT BANK, NATIONAL INVESTMENT BANK, ESTABLISHED
• OPERATIONS LARGELY DETERMINED BY BANK OF GHANA E.G. SECTORIAL
LENDING
• LATER BANK FOR HOUSING AND CONSTRUCTION, COOPERATIVE BANK,
MERCHANT BANK AND NATIONAL SAVINGS AND CREDIT BANKS.
• BANKS LARGELY EMPLOYED O LEVEL AND A LEVEL HOLDERS
• NO FINANCIAL MARKETS AS SUCH IN PLACE THOUGH STOCK EXCHANGE WAS IN
CONTEMPLATION
10
11. CRISIS OF THE 1970S
• PETROLEUM PRICE HIKE FOLLOWED BY YENTUA SAW THE
COUNTRY’S ECONOMY SPIRAL DOWNWARDS INTO CHAOS
• THE EARLY SUCCESSES OF ACHEAMPONG’S REGIME – OPERATION
FEED YOURSELF ET AL, BEGUN TO BE ERODED
• COUNTRY FACED POOR ECONOMIC GROWTH AND SERIOUS
BALANCE OF PAYMENT PROBLEMS
• CRITICAL SHORTAGE OF “ESSENCOS” COUPLED WITH PRICE
CONTROL REGIME.
• THIS CULMINATED IN RAWLINGS I AND RAWLINGS II IN 1979 AND
1981 11
12. CRISIS OF THE 1980S
• ECONOMIC RECOVERY PROGRAM FOLLOWED BY A HOST OF
PROGRAMS CULMINATING IN THE FINANCIAL SECTOR ADJUSTMENT
PROGRAMS
• BANKING SECTOR STILL DOMINATED BY GOVERNMENT OWNED
BANKS AND RESTRICTIVE POLICIES OF THE CENTRAL BANK
• SECTOR CHARACTERIZED BY CONTROLS IN SECTORIAL LENDING
AND INTEREST RATE CAPS
• CRISIS IN THE BANKING SECTOR, HUGE ACCUMULATION OF NON
PERFORMING LOANS, BANKS MAKING HUGE LOSSES, AND FACING
LIQUIDITY AND INSOLVENCY
• MOST BANKS HAD BECOME TECHNICALLY INSOLVENT
12
13. BANKING REFORMS
• GOVERNMENT INTERVENED WITH FINANCIAL SECTOR ADJUSTMENT PROGRAM FINSAP
INTRODUCED:
• FINSAP I - 1988 – 1991
• FINAP II - 1992 – 1995
• FINSAP III – 1995 – 2002
• FINSAP INCLUDED A PROGRAM TO TAKE OVER THE TOXIC ASSETS OF THE BANKING
SECTOR THROUGH THE NON PERFORMING ASSETS RECOVERY TRUST
• INTEREST RATES AND BANK CHARGES DEREGULATED IN 1988
• PHASED REMOVAL OF CREDIT AND EXCHANGE CONTROLS
• FOREIGN CURRENCY MARKET ALSO LIBERALIZED AND FOREX BUREAU SYSTEM
INTRODUCED
• NEW REGULATORY FRAMEWORK FOR BANKS PNDC LAW 225, 1989
• NON-BANK FINANCIAL INSTITUTIONS LAW 1993 PNDC LAW 328
13
14. BANKING REFORMS
• CLEAR GUIDELINES FOR BOTH BANKS AND REGULATORY AUTHORITIES
INCLUDING
• MINIMUM PAID UP CAPITAL AND CAPITAL ADEQUACY REQUIREMENTS,
• RISK EXPOSURE TO INDIVIDUALS, GROUPS AND SUBSIDIARY COMPANIES
RELATIVE TO THEIR NET WORTH,
• RESTRICTIONS ON DIRECT EXPOSURE TO AGRICULTURE, COMMERCE AND
INDUSTRY
• PRUDENTIAL LENDING LIMITS
• GUIDELINES FOR PROVISIONS TO LOAN LOSS
• PRUDENTIAL REPORTING REQUIREMENTS,
• UNIFORM ACCOUNTING AND AUDITING GUIDELINES BASED ON INTERNATIONAL
STANDARDS
• PENALTIES FOR VIOLATION OF THE LAW
14
15. BANKING REFORMS UP TO 1990S & 2000S
• GOVERNMENT EMBARKED ON PROGRAMS TO RESTRUCTURE BANKING
OPERATIONS TO RESTORE THEIR SOLVENCY
• NON-PERFORMING ASSETS RECOVERY TRUST NPART ESTABLISHED TO TAKE
OVER THE TOXIC DEBTS OF FINANCIAL INSTITUTION
• CONSULTANTS SENT IN TO RESTRUCTURE THE OPERATION OF BANKS AND
STRENGTHEN INTERNAL MANAGEMENT, KEY AMONG WHICH WAS GHANA
COMMERCIAL BANK.
• STAFF RETRENCHMENT AND RATIONALIZATION
• CLOSURE OF LOSS MAKING BRANCHES AND OPENING OF VIABLE ONES.
• PRIVATIZATION OF GCB BANK BY LISTING ON STOCK EXCHANGE 1996
• GOVERNMENT ALSO DIVESTED PART OF ITS INVESTMENT IN SSB
15
16. BANKING REFORMS
• ESTABLISHMENT OF STOCK EXCHANGE AND DISCOUNT HOUSES
• LATER ON INTER-BANK OVERNIGHT MARKET ESTABLISHED
• COMPUTERIZATION OF BANKING OPERATIONS
• IN-TAKE OF GRADUATES ON MANAGEMENT TRAINEE LEVEL
• FOREIGN BANKS ALSO EMPLOYING GRADUATES AT CLERICAL LEVEL
• LATER INFLUX OF FOREIGN BANKS AND INVESTORS MADE THE
SECTOR MORE DYNAMIC AND COMPETITIVE.
16
17. NEW BANKING CRISIS
• BANKING SECTOR ATTRACTIVE TO INVESTORS
• INCREASED LICENSING OF NON-BANK FINANCIAL INSTITUTIONS AND
MONEY LENDERS
• ECONOMIC CRISIS – POWER OUTAGE AND RAPID DEPRECIATION OF
EXCHANGE RATE DROVE MANY BUSINESSES TO FAILURE CAUSING NPLS
OF BANKS TO INCREASE
• IMPACT OF THE 2008 INTERNATIONAL BANKING CRISIS COULD ALSO BE
PARTLY BLAMED
• LIQUIDITY CRUNCH IN THE BANKING SECTOR.
• NEW GOVERNMENT IN PLACE IN 2016 ADOPTS A POLICY TO CLEAN-UP
BANKING SECTOR
17
18. BANKING CRISIS
• THE BANKING SECTOR HAS HAD TO GO THROUGH A COMPLETE
OVERHAUL FOLLOWING CRITICAL LIQUIDITY AND SOLVENCY ISSUES
IN THE SECTOR.
• THESE ISSUES WERE BROUGHT TO THE FORE WITH A NEW
GOVERNMENT IN PLACE.
• THE GOVERNMENT UNDERTOOK A REVIEW OF THE SECTOR AND
REALIZED SIGNIFICANT SLIPS IN THE CENTRAL BANK’S
REGULATORY OVERSIGHT OF THE SECTOR
• THE SYSTEM HAD ALSO BECOME CHOKED WITH BANK AND SDTI
LICENSES BEING GRANTED IN DROVES.
• OBVIOUSLY SOMETHING HAD TO BE DONE TO CORRECT THE
18
19. KEY CAUSES OF THE RECENT CRISIS
• POOR LIQUIDITY ARISING FROM:
• INCREASING NPL PORTFOLIO – WHICH ALSO AROSE FROM DIFFICULTIES IN THE ECONOMY
BETWEEN 2012 AND 2015 – POWER CRISIS, RAPID DETERIORATION IN EXCHANGE RATE
• FUNDS LOCKED UP IN THE REAL ESTATE SECTOR
• THE OIL LEGACY DEBTS
• PROLIFERATION OF MICROFINANCE, SAVINGS AND LOANS COMPANIES AND FINANCE
COMPANIES COUPLED WITH A WEAK LICENSING REGIME
• RUSH OF SMALL SPECIALIZED DEPOSIT-TAKING INSTITUTIONS TO BECOME BANKS
• FINANCIAL ENGINEERING – INSTITUTIONS LICENSED WITHOUT SUPPORTING CAPITAL
• WEAK REGULATORY SYSTEM FOR SDTIS
• POOR REGULATORY REGIME – INCLUDING MISUSE OF LIQUIDITY SUPPORT FUNDS.
• WEAK CORPORATE GOVERNANCE SYSTEMS
19
20. REGULATORY RESPONSE
• PASSING OF BANKS AND SPECIALIZED DEPOSIT-TAKING
INSTITUTIONS (BSDTI) ACT 2016 ACT 930 WHICH INCORPORATES
REGULATION OF FINANCIAL HOLDING COMPANIES AND DEPOSIT
INSURANCE ACT 2016, ACT PROVIDING FOR DEPOSIT INSURANCE
• WITHDRAWAL OF BANKING LICENSE OF CAPITAL BANK AND UT
BANK AND ENTRY INTO PURCHASE AND ASSUMPTION
TRANSACTION WITH GCB BANK
• MERGER OF 5 BANKS INTO ONE CONSOLIDATED BANK CBG.
• VOLUNTARY MERGER OF SOME INSTITUTION TO ACHIEVE THE
MINIMUM CAPITAL REQUIREMENT OF GHC 400 MILLION
20
21. REGULATORY RESPONSE – NEW DIRECTIVES
• CORPORATE GOVERNANCE DIRECTIVE
• FIT AND PROPER PERSONS DIRECTIVE
• RISK MANAGEMENT DIRECTIVES FOR VARIOUS CATEGORIES OF
INSTITUTIONS
• MINIMUM CAPITAL REQUIREMENT DIRECTIVE
• BANK OF GHANA LIQUIDITY ASSISTANCE FRAMEWORK
• BANK OF GHANA CYBER SECURITY DIRECTIVE
21
22. THE STRUCTURE OF THE GHANAIAN FINANCIAL
SERVICES SECTOR
• STRUCTURE COULD BE CONSTRUED BOTH IN TERMS OF THE
INSTITUTIONS PLAYING DIFFERENT ROLES OR IN TERMS OF THE
DIFFERENT FINANCIAL MARKETS AND INSTRUMENTS THAT ARE
TRADED IN THE MARKET
• THE FINANCIAL INSTITUTIONS REPRESENTING THE INSTITUTIONS
RESPONSIBLE FOR THE CUSTODY AND FLOW OF MONEY FROM
SURPLUS UNITS TO DEFICIT UNITS
• THE MARKETS – REPRESENTING THE ARRANGEMENT BY WHICH
FINANCIAL INSTITUTIONS, DEFICIT UNITS AND SURPLUS UNITS
COME INTO CONTACT WITH EACH OTHER
• THE FINANCIAL INSTRUMENTS – REPRESENTING THE MEANS BY
22
23. CLASSIFICATION OF FINANCIAL INSTITUTIONS
• THE FOLLOWING CLASSES OF INSTITUTIONS MAY BE IDENTIFIED IN
THE FINANCIAL SECTOR
• INSURANCE COMPANIES
• INVESTMENT & CAPITAL MARKET OPERATORS
• BROKERAGE HOUSES
• ASSETS MANAGEMENT COMPANIES
• MUTUAL FUNDS
• NON-BANK FINANCIAL INSTITUTIONS
• DEPOSIT-TAKING FINANCIAL INSTITUTIONS
• BANKS AND
• SPECIALIZED DEPOSIT-TAKING FINANCIAL INSTITUTIONS
23
24. INSURANCE COMPANIES
• INSURANCE COMPANIES ARE CLASSIFIED AS FINANCIAL
INSTITUTIONS BECAUSE THEY ARE ENGAGED IN POOLING OF
FUNDS FROM INDIVIDUALS, INSTITUTIONS AND GOVERNMENT
• THEIR OBJECTIVE IS TO MAKE A PREMIUM BETWEEN FUTURE
EXPECTED RISK AND FUTURE REALIZED RISK
• THEY THEREFORE ENTER INTO INSURANCE CONTRACTS WITH
VARIOUS PARTIES WHEREBY THE PARTIES PAY PERIODIC PREMIUM
WITH THE PROMISE THAT IF CERTAIN FUTURE RISKS ARE REALIZED,
THE INSURANCE COMPANY WOULD COMPENSATE THE NAMED
BENEFICIARY OF THE CONTRACT A SPECIFIED SUM OF MONEY
24
25. INSURANCE
• TO MANAGE THESE RISKS INSURANCE COMPANIES PLACE THESE
FUNDS IN SUITABLE INVESTMENTS TO EARN THEM A RETURN
• WHERE THE RISKS INSURED DO NOT MATERIALIZE, THE RETAINED
FUNDS BECOME INCOME TO THE INSURANCE COMPANY.
• INSURANCE COMPANIES ARE IN A HIGH RISK INDUSTRY IN THAT
WHEN SOME RISKS MATERIALIZE IN AN INORDINATE SCALE IT
COULD LEAD TO THE INSURANCE COMPANY PAYING HUGE SUMS
OF MONEY OUT.
25
26. CLASSIFICATION OF INSURANCE
• UNDER CURRENT LEGISLATION, INSURANCE IS CLASSIFIED UNDER
TWO MAIN BROAD HEADINGS:
• GENERAL INSURANCE – THIS COVERS HAZARDS TO LIFE AND
PROPERTY SUCH AS FIRE, MARINE TRAVEL, FLOOD ETC
• LIFE INSURANCE – OTHERWISE TERMED LIFE ASSURANCE WHERE
THE SUBJECT OF THE INSURANCE IS THE LIFE OF A SPECIFIED
PERSON TERMED AS THE INSURED.
• INSURANCE COMPANIES ALSO MAKE SOME MONEY BY GIVING
CREDIT GUARANTEES.
26
27. INVESTMENT BANKS AND CAPITAL MARKET
OPERATORS
• THESE ARE FINANCIAL INSTITUTIONS AND INDIVIDUALS THAT FOCUS ON THE
CAPITAL MARKET.
• THEY ENGAGE IN THE FOLLOWING ACTIVITIES:
• INVESTMENT BANKS
• BROKERAGE (BUYING AND SELLING SHARES ON BEHALF OF CLIENTS)
• ISSUING HOUSES - RAISING CAPITAL THROUGH IPOS
• INVESTMENT ADVISORS
• ASSET MANAGEMENT COMPANIES – FUND MANAGER
• COLLECTIVE INVESTMENT SCHEMES INCLUDING MUTUAL FUNDS AND UNIT TRUSTS
• REGISTRARS - SHARE REGISTRY SERVICES
• CUSTODIAN SERVICES
• TRUSTEES
27
28. NON-BANK FINANCIAL INSTITUTIONS
• NON-BANK FINANCIAL INSTITUTIONS ARE INSTITUTIONS THAT ARE
ENGAGED IN SPECIFIED FINANCIAL SERVICES THOUGH THEY ARE
NOT PERMITTED TO TAKE DEPOSITS FROM THE PUBLIC
• NON-BANK FINANCIAL INSTITUTIONS IN THE COUNTRY INCLUDE:
• MORTGAGE COMPANIES
• BUILDING SOCIETIES
• MONEY LENDERS
• FOREX BUREAS
• MONEY TRANSFER AGENTS
• FINANCIAL NGOS 28
29. PERMISSIBLE ACTIVITIES OF NON-BANK FINANCIAL
INSTITUTIONS
• GRANTING OF LOANS FOR MORTGAGE
• LENDING TO DEPRIVED INDIVIDUALS
• MONEY TRANSFER
• LEASING OPERATIONS
• MONEY LENDING
• NON-DEPOSIT-TAKING MICROFINANCE SERVICES
• CREDIT UNIONS
• ACCEPTANCE HOUSES
• BUILDING SOCIETIES
• DISCOUNT HOUSES
29
30. BANKS AND SPECIALIZED DEPOSIT-TAKING
FINANCIAL INSTITUTIONS
• THIS SECTOR HAS ALSO UNDERGONE A RAPID EVOLUTION AND
CYCLICAL DEVELOPMENT OVER THE PAST
• PREVIOUS LICENSING REGIMES RECOGNIZED THE FOLLOWING
CLASS OF BANKS
• TRADITIONAL COMMERCIAL BANKING
• MERCHANT BANKING
• DEVELOPMENT BANKING
30
31. TRADITIONAL COMMERCIAL BANKING
• TRADITIONAL COMMERCIAL BANKING ENTAILS
• ACCEPTANCE OF DEPOSITS
• PAYMENT ON BEHALF OF CUSTOMERS
• LENDING TO INDIVIDUALS AND BUSINESSES IN VARIOUS
SECTORS OF THE ECONOMY
• THIS DEFINITION FEATURES IN THE OLD BANKING ACT 2004
• THE NEW BSDTI ACT NOW REFERS TO THESE ACTIVITIES AS
CONSTITUTING “DEPOSIT-TAKING BUSINESS”
31
32. TRADITIONAL MERCHANT BANKING
• IN THE PREVIOUS REGIME WE HAD MERCHANT BANKS LIKE
ECOBANK, CALBANK AND THE OLD MERCHANT BANK
• MERCHANT BANKING ACTIVITY INCLUDES THE ACTIVITIES BELOW
UNDERTAKEN FOR LARGE CORPORATIONS AND HIGH NET WORTH
INDIVIDUALS:
• INTERNATIONAL TRADE FINANCE SERVICE
• UNDERWRITING OF STOCK AND BOND ISSUES
• LOAN SERVICES
• FINANCIAL ADVISORY SERVICES
• FUNDRAISING ACTIVITIES INCLUDING RAISING OF CAPITAL
• ONE SEES AN OVERLAP WITH INVESTMENT BANKING SERVICES
32
33. DEVELOPMENT BANKS
• GHANA HAS HAD A FORAY ALSO WITH THE CONCEPT OF
DEVELOPMENT BANKS
• THE OBJECTIVE OF DEVELOPMENT BANKS IS TO FOCUS THEIR
LENDING ON SPECIFIC ASPECTS OR SECTORS OF THE ECONOMY
• THE CONCEPT WAS DILUTED WITH THE INTRODUCTION OF THE
UNIVERSAL BANKING LICENSE.
• DEVELOPMENT BANKS IN GHANA INCLUDE
• AGRICULTURAL DEVELOPMENT BANK,
• NATIONAL INVESTMENT BANK
• ERSTWHILE BANK FOR HOUSING AND CONSTRUCTION
• PRUDENTIAL BANK 33
34. RURAL AND COMMUNITY BANKS
• RURAL AND COMMUNITY BANKS WERE DEVELOPED ALONG THE
LINES OF THE UNIT BANK CONCEPT
• A UNIT BANK IS A BANK THAT HAS NO BRANCHES
• IN THE CASE OF COMMUNITY BANKS THEY ARE NOW ALLOWED TO
ESTABLISH BRANCHES WITHIN THEIR CATCHMENT AREAS.
• THE OBJECTIVE OF ESTABLISHMENT WAS TO CONTRIBUTE TO THE
DEVELOPMENT OF PARTICULAR RURAL COMMUNITIES.
• LATER THE CONCEPT WAS EXPANDED TO INCLUDE COMMUNITIES
IN THE URBAN AREAS.
34
35. THE CONCEPT OF UNIVERSAL BANKING
• THE CONCEPT OF UNIVERSAL BANKING HAS BEEN IN EXISTENCE IN THE WORLD IN
SOME JURISDICTIONS E.G. US THOUGH IT HAS NOT BEEN REFERRED TO AS SUCH
• GHANA INTRODUCED THIS CONCEPT IN THE 2004 BANKING ACT WHERE BANKS
WERE ALLOWED TO LICENSE AS UNIVERSAL BANKS, UNDERTAKING A WHOLE RANGE
OF TRADITIONAL, MERCHANT BANKING AND UNIVERSAL BANKING ACTIVITY – SEE
SECTION 11 OF ACT 673
• THIS ACT ALSO INTRODUCED THE CONCEPT OF OFF-SHORE BANKING THOUGH THIS
HAS NOW BEEN PROSCRIBED DUE TO THE RISKS OF MONEY-LAUNDERING
• THIS CONCEPT HAS BEEN MAINTAINED IN THE CURRENT BSTDI ACT – SECTION 18
35
36. PERMISSIBLE ACTIVITIES OF UNIVERSAL BANKS
• (A) ACCEPTANCE OF DEPOSITS AND OTHER REPAYABLE FUNDS FROM THE
PUBLIC;
• (B) LENDING;
• (C) FINANCIAL LEASING;
• (D) INVESTMENT IN FINANCIAL SECURITIES;
• (E) MONEY TRANSMISSION SERVICES;
• (F) ISSUING AND ADMINISTERING OF MEANS OF PAYMENT INCLUDING
• CREDIT CARDS, TRAVELLERS CHEQUES, BANKERS’ DRAFTS AND
ELECTRONIC MONEY;
• (G) GUARANTEES AND COMMITMENTS;
36
37. PERMISSIBLE ACTIVITIES - 2
• (H) TRADING FOR OWN ACCOUNT OR FOR ACCOUNT OF
CUSTOMERS IN
• (I) MONEY MARKET INSTRUMENTS,
• (II) FOREIGN EXCHANGE, OR
• (III) TRANSFERABLE SECURITIES;
• (I) PARTICIPATION IN SECURITIES ISSUES AND PROVISION OF
SERVICES RELATED TO THOSE ISSUES;
• (J) ADVICE TO UNDERTAKINGS ON CAPITAL STRUCTURE,
ACQUISITION AND MERGER OF UNDERTAKING;
37
38. PERMISSIBLE ACTIVITIES - 3
• (K) PORTFOLIO MANAGEMENT AND ADVICE;
• (L) KEEPING AND ADMINISTRATION OF SECURITIES;
• (M) CREDIT REFERENCE SERVICES;
• (N) SAFE CUSTODY OF VALUABLES;
• (O) ELECTRONIC BANKING;
• (P) PAYMENT AND COLLECTION SERVICES;
• (Q) BANCASSURANCE;
• (R) NON INTEREST BANKING SERVICES; AND
• (S) ANY OTHER SERVICES THAT THE BANK OF GHANA MAY DETERMINE.
38
39. PERMISSIBLE ACTIVITIES OF SDTIS
• SPECIALIZED DEPOSIT-TAKING INSTITUTIONS INCLUDE SAVINGS
AND LOANS COMPANIES AND FINANCE COMPANIES
• THEY CAN UNDERTAKE ALL TRADITIONAL BANKING ACTIVITIES
BUT CANNOT ENGAGE IN ANY FOREIGN SERVICES OR FOREIGN
DENOMINATED TRANSACTIONS SECTION 18 (2) BSTDI ACT
• THEY ALSO CANNOT ENGAGE IN INVESTMENT BANKING ACTIVITY
AS SPELLED OUT IN THEIR OPERATING RULES PROVIDED BY BANK
OF GHANA
39
40. RECENT DEVELOPMENTS IN THE FINANCIAL
SECTOR
• REINTRODUCTION OF THE CONCEPT OF DEVELOPMENT BANKS AS EXISTING
DEVELOPMENT BANKS HAVE STRAYED AWAY FROM THEIR FIRST LOVE.
• RAPID DEVELOPMENT OF ELECTRONIC BANKING SERVICES INCLUDING
ELECTRONIC PAYMENT CHANNELS SUCH AS MOBILE MONEY AND EFTPOS
• THE NEW CONCEPT COMING UP IS ELECTRONIC CURRENCY WITH GHANA ON THE
VERGE OF INTRODUCING THE ELECTRONIC CEDI
• WITH AUTOMATION OF ROLES IN BANKING THE SECTOR IS BECOMING MORE
AND MORE SALES AND MARKETING ORIENTED
• THE ONSET OF COVID 2019 HAS INCREASED THE APPLICATION OF TECHNOLOGY
FOR BANK SERVICES AND ALSO HAD IMPACT ON BANK LOAN BOOK AND MADE
THEM MORE CONSERVATIVE.
40
45. FINANCIAL MARKETS
• FINANCIAL MARKETS ARE A VERY ESSENTIAL COMPONENT OF
FINANCIAL SYSTEMS
• IT IS THE PLATFORM THAT ENABLES INSTITUTIONS TO ENGAGE
EACH OTHER AND MAKE TRADES.
• IT HAS GROWN IN SOPHISTICATION OVER THE YEARS FROM
MANUAL PHYSICAL LOCATIONS AND TELEPHONE TRADING TO
INTERNET BASED ELECTRONIC PLATFORMS.
• TRADING OF FINANCIAL INSTRUMENTS RANGES FROM OVER THE
COUNTER DEALING TO TRADING ON SOPHISTICATED ELECTRONIC
BASED PLATFORMS.
• THE MAJOR CATALYST OF THIS DEVELOPMENT HAS BEEN RAPID
ADVANCEMENTS IN TECHNOLOGY.
45
46. ROLE OF FINANCIAL MARKETS
• TO PROVIDE AVENUE TO BUY AND SELL FINANCIAL SECURITIES
• PROVIDES AN AVENUE TO MANAGE LIQUIDITY
• PROVIDES INFORMATION ON PRICES AVAILABLE ON THE MARKET
• PROVIDES A PLATFORM FOR DEVELOPING NEW INNOVATIVE MEANS
OF RAISING FUNDS.
• EMBEDDED WITH RULES TO PROTECT THE INTEREST OF INVESTORS
AND ISSUERS OF SECURITY
• PROVIDES A MEANS OF SETTLEMENT OF TRANSACTIONS BETWEEN
PARTIES.
• PROVIDES AN AUDIT TRIAL OF ALL DEALS.
• TRANSFORMATION OF RISK THROUGH RISK SPREADING OR RISK
POOLING
46
47. CLASSIFICATION OF FINANCIAL MARKETS
• FINANCIAL MARKETS MAY BE CLASSIFIED INTO THE FOLLOWING
CATEGORIES:
• MONEY MARKET – SHORT TERM FUNDS FOR UP TO ONE YEAR
• CAPITAL MARKET – LONG TERM FUNDS FROM ONE YEAR
UPWARDS
• FOREIGN EXCHANGE MARKET – FOR SOURCING AND TRADING
IN FOREIGN EXCHANGE
• DERIVATIVES MARKET – FOR THE MANAGEMENT OF FINANCIAL
RISK
• THE VARIOUS CATEGORIES ALSO HAVE OVER THE COUNTER
47
48. THE MONEY MARKET
• THE MONEY MARKET IS THE MARKET FOR SHORT TERM FUNDS.
• THE MONEY MARKET IS THE SYSTEMS AND STRUCTURES PUT IN
PLACE FOR THE EXCHANGE AND TRADING OF FINANCIAL
INSTRUMENTS OF A TENOR OF UP TO ONE YEAR.
• THE MONEY MARKET MAY BE ON AN ORGANIZED MARKET SUCH AS
THE INTERBANK OVERNIGHT MARKET OR OVER THE COUNTER.
• WE CAN ALSO DISTINGUISH BETWEEN PRIMARY ISSUES OF SECURITY
VERSUS SECONDARY TRADING OF SECURITY
48
49. MONEY MARKET INSTRUMENTS
• GOVERNMENT SECURITIES OF DURATION UP TO ONE YEAR
• 91 DAY TREASURY BILL
• 182 DAY TREASURY BILL
• 364 DAY TREASURY BILL
• ONE YEAR TREASURY NOTE
• MONEY MARKET INSTRUMENTS ISSUED BY BANKS AND CORPORATE
ORGANIZATIONS
• COMMERCIAL PAPER
• BANKERS ACCEPTANCES
• CERTIFICATES OF DEPOSIT
49
50. TREASURY BILLS
• TREASURY BILLS ARE FINANCIAL SECURITIES ISSUED AT A
DISCOUNT BY THE GOVERNMENT.
• THEY ARE USED TO SOURCE FUNDS FOR THE GOVERNMENT AND
ARE AN AVENUE FOR INVESTMENT OF SURPLUS FUNDS OF
FINANCIAL INSTITUTIONS.
• THEY ARE AVAILABLE IN 91 DAY AND 182 DAY AND NOW 364 DAY
TENORS.
• THEY ARE TRADED ON THE WEEKLY BANK OF GHANA AUCTION BY
PRIMARY DEALING BANKS USING A COMPUTERIZED PLATFORM, THE
CENTRAL SECURITIES DEPOSITORY
50
51. EXAMPLE
• FACE VALUE – 100,000
• DISCOUNT RATE – 15%
• TENOR- 91 DAYS
• DISCOUNTED VALUE – AMOUNT INVESTED (PRICE)=
FACE VALUE X (1- ((91/364) X DISCOUNT RATE))= 96,250.00
• THE DISCOUNT IS ALSO CALCULATED AS FACE VALUE X DISCOUNT
RATE X (91/364) = 100,000 X 0.15 X (91/364) = 3,750.00
51
52. BANKERS ACCEPTANCES
• BANKERS ACCEPTANCES ARE BILLS OF EXCHANGE OF A TENOR OF
UP TO ONE YEAR, DRAWN BY MERCHANTS AND ACCEPTED BY A
BANK
• ACCEPTANCE IS EVIDENCED BY A SIGNATURE ACROSS THE FACE OF
THE INSTRUMENT AND INDICATING CLEARLY THE PLACE AND
DATE ON WHICH IT WILL BE PAID.
• AN ACCEPTANCE IS AN UNCONDITIONAL UNDERTAKING BY THE
BANK TO MAKE PAYMENT TO SUBSEQUENT HOLDERS OF THE BILL
• THE BANK CHARGES A COMMISSION FOR THIS
52
53. COMMERCIAL PAPER
• A COMMERCIAL PAPER IS AN IOU OR PROMISSORY NOTE BY WHICH
INSTITUTIONS BORROW MONEY ON THE MONEY MARKET.
• THE TERMS OF THE PAPER ARE INDICATED IN THE COMMERCIAL
PAPER DOCUMENT.
• IT IS NORMALLY ISSUED IN MULTIPLES OF A SPECIFIED AMOUNT.
• COMMERCIAL PAPER MAY BE ISSUED OVER THE COUNTER OR SOLD
ON AN ORGANIZED MARKET.
53
54. CERTIFICATES OF DEPOSIT
• CERTIFICATES OF DEPOSIT ARE NEGOTIABLE TIME DEPOSIT.
• THEY ARE SIMILAR TO FIXED DEPOSITS ONLY THEY ARE
NEGOTIABLE
• THEY ARE USED FOR THE MOBILIZATION OF WHOLESALE FUNDS
• THEY ARE CAPABLE OF NEGOTIATION BEFORE MATURITY THOUGH
IN GHANA MOST CD ISSUED ARE ISSUED TO CUSTOMERS WHO
HOLD THEM TO MATURITY DUE TO LACK OF A SECONDARY
MARKET.
54
55. OVER THE COUNTER
• FINANCIAL INSTRUMENTS THAT MAY BE OBTAINED OVER THE
COUNTER FROM FINANCIAL INSTITUTIONS INCLUDE VARIOUS
TYPES OF TIME DEPOSITS INCLUDING FIXED DEPOSITS
• HYBRID TIME DEPOSIT PRODUCTS
• IN GHANA BANKS ALSO PROVIDE CERTIFICATES OF DEPOSITS OVER
THE COUNTER WHICH ARE NOT TRADED ON ANY ORGANIZED
MARKET.
55
56. OVERNIGHT MARKET
• BANKS USE THE OVERNIGHT MARKET TO LEND AND BORROW FROM
EACH OTHER AS A MEANS OF MEETING THEIR LIQUIDITY RESERVE
REQUIREMENTS.
• FOLLOWING THE FAILURE OF BHC AND CORPORATIVE BANK BOG
INSTITUTED THE PLEDGING OF GOVERNMENT FINANCIAL
SECURITIES TO SECURE OVERNIGHT LENDING.
• THE RATE CHARGED ON OVERNIGHT FUND DEPEND ON THE
FORCES OF DEMAND AND SUPPLY ON THE MARKET.
• PRIOR TO THE ESTABLISHMENT OF THE OVERNIGHT MARKET
BANKS WERE OBTAINING THEIR SHORT TERM FUNDS FROM
DISCOUNT HOUSES. 56
57. MONEY MARKET INSTITUTIONS
• BANK OF GHANA AS A LENDER OF LAST RESORT
• BANKS AND SDTIS
• DISCOUNT HOUSES – NOW DEFUNCT THOUGH THEY STILL EXIST IN
OTHER COUNTRIES
• INSURANCE COMPANIES ALSO INVEST IN MONEY MARKET
INSTRUMENTS
• CAPITAL MARKET COMPANIES ALSO INVEST IN MONEY MARKET
INSTRUMENTS LIKE TREASURY BILLS AND COMMERCIAL PAPER
57
58. ROLE OF THE MONEY MARKET
• TO MAINTAIN LIQUIDITY IN THE MARKET – HOLDERS CAN EASILY
OFFLOAD THEIR MONEY MARKET INSTRUMENTS
• PROVIDES MONEY AT SHORT NOTICE – E.G. INTERBANK MARKET,
OR FOR CORPORATES SELLING MONEY MARKET INSTRUMENTS
THEY ARE HOLDING OR ISSUING NEW ONES
• IT HELPS IN PROVIDING AN AVENUE FOR INVESTMENT OF SURPLUS
FUNDS THAT ARE NOT IMMEDIATELY NEEDED
• IT HELPS IN GOVERNMENT MONETARY POLICY
58
59. THE CAPITAL MARKET
• THE CAPITAL MARKET IS THE MARKET FOR LONG TERM (MORE
THAN ONE YEAR) FINANCIAL INSTRUMENTS.
• IT COMPRISES THE NEW ISSUES MARKET (PRIMARY MARKET), AND
THE SECONDARY TRADING MARKET
• FINANCIAL INSTRUMENTS FOR COMPANIES THAT ARE NOT LISTED
ARE TRADED OVER THE COUNTER.
59
60. CAPITAL MARKET INSTRUMENTS
• CAPITAL MARKET INSTRUMENTS INCLUDE:
• GOVERNMENT SECURITIES OF MORE THAN ONE YEAR
• TWO YEAR FIXED RATE NOTES
• THREE YEAR FIXED
• FIVE YEAR FIXED RATE NOTES
• TEN YEAR BOND (AND OVER)
• LONG TERM NOTES
• CORPORATE BONDS AND DEBENTURES – HFC BOND SERIES, GHANA STOCK
EXCHANGE COMMEMORATIVE BOND
60
61. CAPITAL MARKET INSTITUTIONS AND
PLAYERS
• BROKERAGE HOUSES
• ASSETS MANAGEMENT COMPANIES
• MUTUAL FUNDS
• BANKS
• INSURANCE COMPANIES
• INVESTMENT BANKS AND MERCHANT BANKS – RAISING CAPITAL THROUGH IPOS
• SHARE REGISTRIES
• TRUSTEES
• CUSTODIANS
61
62. ROLE OF CAPITAL MARKETS
• FOR RAISING OF LONG TERM FUNDS
• SECONDARY MARKETS PROVIDE LIQUIDITY
• PROTECTION OF INVESTORS
• REGULATION OF FINANCIAL INSTITUTIONS
• REGULATION OF PRIMARY ISSUES.
62
63. THE FOREIGN EXCHANGE MARKET
• THE FOREIGN EXCHANGE MARKET IS THE MARKET FOR THE
EXCHANGE OF FOREIGN CURRENCY AND FOR THE MANAGEMENT
OF RISKS PERTAINING TO HOLDING, TRADING AND DEALING IN
FOREIGN EXCHANGE.
• BANKS TRADE IN FOREIGN CURRENCY ON OWN ACCOUNT OR
PURCHASE FOREIGN CURRENCY FOR THEIR CUSTOMERS WHO HAVE
SUCH NEED.
• THEY ALSO PURCHASE FOREIGN CURRENCY FROM THEIR
CUSTOMERS WHO RECEIVE FOREIGN EXCHANGE INFLOWS INTO
THEIR ACCOUNTS.
63
65. FOREIGN EXCHANGE MARKET INSTRUMENTS
• PRODUCTS TRADED ARE VARIOUS NATIONAL CURRENCIES
• BANK TRADE ON OWN ACCOUNT OR PURCHASE AND SELL FOREIGN
CURRENCIES ON BEHALF OF THEIR CUSTOMERS.
• THEY MAKE SOME MARGIN IN PROCURING AND SELLING FOREIGN
EXCHANGE.
• BANKS ALSO PROVIDE FOREIGN EXCHANGE DENOMINATED TIME
DEPOSITS
65
66. FOREIGN EXCHANGE MARKET PARTICIPANTS
• BANK OF GHANA – MAIN PARTICIPANT
• BANKS
• IMPORTERS AND EXPORTERS
• BUSINESSES REQUIRING FOREIGN EXCHANGE FOR ONE OFF
TRANSACTIONS
• INDIVIDUALS WHO NEED TO BUY OR SELL FOREIGN EXCHANGE
66
67. ROLE OF FOREIGN EXCHANGE MARKET
• TO PROVIDE A MARKET FOR SOURCING OF FOREIGN EXCHANGE
• TO PROVIDE INCOME TO INVESTORS
• TO PROVIDE AN AVENUE FOR TRADING IN FOREIGN EXCHANGE
DERIVATIVES
• TO PROVIDE RULES FOR SETTLEMENT AMONGST TRADERS AND
FINANCIAL INSTITUTIONS
• TO PROVIDE INVESTMENT AVENUES.
67
68. DERIVATIVES MARKET
• NOT VERY DEVELOPED IN THIS COUNTRY
• IT’S A MARKET THAT DERIVES ITS VALUES FROM PRICES OF
FINANCIAL INSTRUMENTS IN OTHER MARKETS
• IT IS USED PRIMARILY TO MANAGE FINANCIAL RISKS IN OTHER
MARKETS.
• NOTWITHSTANDING THERE ARE ALSO INHERENT RISKS
ENCOUNTERED IN DEALING IN DERIVATIVES.
• WE NOW HAVE FORWARDS SALES OF FOREIGN CURRENCY ON THE
INTERBANK FOREX MARKET
68
69. DERIVATIVES MARKET PARTICIPANTS
• HEDGERS – TO MANAGE RISK
• SPECULATORS – TO MAKE A PROFIT
• ARBITRAGEURS – TO TAKE ADVANTAGE OF PRICE DIFFERENTIALS
• BANKS ARE NORMALLY HEDGERS
69
70. EXAMPLES OF DERIVATIVE PRODUCTS – OVER
THE COUNTER
• SOME DERIVATIVE INSTRUMENTS INCLUDE:
• FORWARD EXCHANGE AGREEMENT – AGREEMENT BETWEEN TWO
PARTIES FOR THE FUTURE PURCHASE AND SALE OF FOREIGN
EXCHANGE AT A SPECIFIED RATE AT A SPECIFIED FUTURE DATE
• FORWARD RATE AGREEMENTS – AGREEMENT BETWEEN TWO
PARTIES FOR THE EXCHANGE OF PAYMENTS USUALLY EQUAL TO
SHORT TERM UNDERLYING INTEREST OBLIGATIONS OF THOSE
PARTIES OVER A SINGLE PERIOD.
70
71. OVER THE COUNTER DERIVATIVES - SWAPS
• CURRENCY SWAPS – THIS IS AN AGREEMENT IN WHICH TWO
PARTIES EXCHANGE AN EQUIVALENT AMOUNT OF MONEY WITH
EACH OTHER BUT IN DIFFERENT CURRENCIES.
• IT AMOUNTS TO A LOAN SWAP IN WHICH EACH PARTY PAYS THE
UNDERLYING INTEREST APPLICABLE TO LOANS IN THAT CURRENCY.
• AT THE END OF THE TERM THEY PAY BACK TO EACH OTHER THE
ORIGINAL PRINCIPAL EITHER AT THE ORIGINAL SPOT RATE OR AT A
FUTURE AGREED RATE
• INTEREST RATE SWAPS – FORWARD CONTRACTS IN WHICH TWO
PARTIES AGREE TO SWAP VARIABLE RATES BASED ON DIFFERENT
MONEY MARKET REFERENCE RATES E.G. TREASURY BILL RATES AS
AGAINST LIBOR RATES
71
72. OVER THE COUNTER OPTIONS
• FINANCIAL OPTION CONTRACTS ARE BINDING AGREEMENTS
BETWEEN TWO PARTIES WHICH GIVE ONE PARTY THE RIGHT, BUT
NOT THE OBLIGATION TO BUY OR SELL AN AGREED QUANTITY OF
A PARTICULAR CURRENCY, FINANCIAL INSTRUMENT, FUTURES
CONTRACT, STOCK INDEX OR STOCK AT AN AGREED PRICE ON OR
BEFORE A PREDETERMINED DATE
• THEY ENABLE PARTIES TO HEDGE THEIR EXPOSURES WHILST AT THE
SAME TIME RETAINING THE BENEFIT OF A FAVOURABLE MOVEMENT
IN RATES AND PRICES.
72
73. TRADED DERIVATIVES - FUTURES
• FUTURES CONTRACTS ARE BINDING AGREEMENTS TO BUY OR SELL
STANDARD QUANTITIES OF SPECIFIED FINANCIAL INSTRUMENTS OR
COMMODITIES AT PRICES AGREED AT THE TIME OF THE DEAL, FOR
DELIVERY AT SPECIFIED TIMES IN THE FUTURE.
• THEY CONTRACTS ARE IN STANDARD FORM IN CONTRAST WITH
OVER THE COUNTER COUNTERPARTS.
• THEY ARE AVAILABLE IN THE FOLLOWING UNDERLYING
COMMODITIES:
• INTEREST RATE CONTRACTS
• FOREIGN CURRENCY
• STOCK EXCHANGE INDEX 73
74. TRADED DERIVATIVES - OPTIONS
• AN EXCHANGE-TRADED OPTION IS A STANDARDIZED DERIVATIVE
CONTRACT, TRADED ON AN EXCHANGE, THAT SETTLES THROUGH
A CLEARINGHOUSE, AND IS GUARANTEED
• LIKE THEIR OTC COUNTERPARTS IT GIVES ONE PARTY THE RIGHT,
BUT NOT THE OBLIGATION TO BUY OR SELL AN AGREED QUANTITY
OF A PARTICULAR CURRENCY, FINANCIAL INSTRUMENT, FUTURES
CONTRACT, STOCK INDEX OR STOCK AT AN AGREED PRICE ON OR
BEFORE A PREDETERMINED DATE
74
75. PAYMENT AND SETTLEMENTS
• THE FINANCIAL MARKETS ALSO HAVE A PLATFORM FOR PAYMENTS
AND SETTLEMENTS.
• GHANA’S PAYMENT AND SETTLEMENTS SYSTEM HAS EVOLVED
FROM THE MORE ELEMENTARY CHEQUES AND PAYMENT ORDER
SYSTEMS TO MORE ELECTRONIC PLATFORMS.
• BANK OF GHANA PAYS THE KEY ROLE OF PROVIDING REGULATORY
OVERSIGHT AND DEVELOPING NETWORK ARRANGEMENTS FOR
PAYMENT.
• IN THIS DIRECTION BOG HAS PUT IN PLACE THE GHANA INTERBANK
PAYMENT AND SETTLEMENT SYSTEM TO FACILITATE THIS ROLE
• KEY PAYMENT PLATFORMS INCLUDE THE GHAC – GHANA
AUTOMATED CLEARING SYSTEM, GHANA REAL TIME GROSS
75
76. REGULATION OF FINANCIAL INSTITUTIONS
• REGULATION OF FINANCIAL INSTITUTIONS IS SHARED AMONGST A
NUMBER OF REGULATORS:
• NATIONAL INSURANCE COMMISSION REGULATES INSURANCE
ACTIVITY
• SECURITIES AND EXCHANGE COMMISSION REGULATES CAPITAL
MARKET ACTIVITY
• GHANA STOCK EXCHANGE IS A SELF-REGULATORY INSTITUTION
THAT REGULATES SECONDARY TRADING ACTIVITY IN FINANCIAL
INSTRUMENTS
• BANK OF GHANA REGULATES NON-BANK FINANCIAL
INSTITUTIONS, BANKS AND SDTIS
• APEX RURAL BANK ALSO EXERCISES SOME REGULATORY CONTROL
76
77. REGULATION OF INSURANCE COMPANIES
• NATIONAL INSURANCE COMMISSION
• NEW INSURANCE ACT PASSED – 2021, ACT 1061
• REGULATORY PROVISIONS INCLUDE
• LICENSING REGIME
• LIMITS ON CONTROL OF AN ENTITY
• BANCASSURANCE GUIDELINES
• INSURANCE AND BANKING PRODUCT GUIDELINES
• MARKET CONDUCT RULES
• CODE OF PRACTICE
• GUIDELINES ON PREMIUM PAYMENT ETC.
77
78. REGULATION OF INVESTMENT COMPANIES
• THE MAIN REGULATOR OF THE CAPITAL MARKET IS THE SECURITIES AND
EXCHANGE COMMISSION (SEC).
• IT ALSO REGULATES THE GHANA STOCK EXCHANGE (GSE) AND THE
GHANA ALTERNATIVE MARKET (GAX).
• OTHER SECTOR SPECIFIC REGULATORS MAY ALSO PLAY A KEY ROLE
WHEN AN ISSUER OF SECURITIES IS A REGULATED ENTITY.
• FOR EXAMPLE, WHERE AN EQUITY ISSUANCE RESULTS IN A PERSON
ACQUIRING MORE THAN 10% OF THE SHARES OF AN ENTITY, APPROVAL
NEEDS TO BE SOUGHT FROM THE BANK OF GHANA IN THE CASE OF A
NON-BANK FINANCIAL INSTITUTION, DEPOSIT TAKER OR BANK OR FROM
THE NIC IN THE CASE OF AN INSURANCE COMPANY.
78
79. SECURITIES MARKET LEGISLATION, RULES AND
GUIDELINES
• KEY LEGISLATION AND RULES APPLICABLE TO LISTING AND TRADING IN GHANA
ARE:
• SECURITIES INDUSTRY ACT 2016 ACT 929
• SEC REGULATIONS 2003 (LI 1728)
• SEC COMPLIANCE MANUAL FOR BROKERS, DEALERS, INVESTMENT ADVISORS
AND REPRESENTATIVES
• GSE RULE BOOK ISSUED BY GSE WHICH CONTAINS:
• THE LISTING RULES
• THE DEALING MEMBERSHIP RULES
• THE TRADING AND SETTLEMENT RULES FOR THE GSE
• GAX LISTING RULES ISSUED BY GSE
• CENTRAL SECURITIES DEPOSITORY RULES AND OPERATIONAL PROCEDURES.
79
80. REGULATION OF NON-BANK FINANCIAL
INSTITUTION
• THE APEX REGULATOR FOR NON-BANK FINANCIAL INSTITUTIONS IS
THE BANK OF GHANA
• BOG SUPERVISES THROUGH
• LICENSING REQUIREMENTS
• OPERATING RULES FOR NON-BANK FINANCIAL INSTITUTIONS
• DIRECTIVES
• OFF AND ON-SITE SUPERVISION AND INSPECTION
• NON-BANK FINANCIAL INSTITUTIONS ACT 2008, ACT 774
80
81. REGULATION OF BANKS & SDTIS
• BANK OF GHANA REGULATES BANKS AND SPECIALIZED DEPOSIT-
TAKING INSTITUTIONS THROUGH:
• LICENSING REGIME
• REQUIREMENTS FOR APPOINTMENT OF SENIOR MANAGEMENT
• DIRECTIVES
• PRUDENTIAL REPORTS
• ON-AND OFFSITE SUPERVISION
• EXIT-MANAGEMENT REGIME – CRISIS RESOLUTION
• VARIOUS LEGISLATION AFFECTING THE FINANCIAL SECTOR
81
82. LEGISLATION AFFECTING BANKING ACTIVITIES
• THE BANK OF GHANA ACT 2002, ACT 612, THE EMPOWERING
LEGISLATION
• PAYMENT SYSTEMS AND SERVICES ACT, 2019, ACT 987
• THE NON-BANK FINANCIAL INSTITUTIONS ACT, 2008 ACT 774 FOR
NON-BANK NON-DEPOSIT TAKING FINANCIAL INSTITUTIONS
• CREDIT REPORTING ACT 2007, ACT 726
• FOREIGN EXCHANGE ACT 2006 ACT 723
• BANKS AND SPECIALIZED DEPOSIT-TAKING INSTITUTIONS ACT
2016 ACT 930
• DEPOSITORS INSURANCE ACT 2016, ACT 931
82
83. OTHER REGULATORY AUTHORITIES
• OTHER KEY REGULATORY AUTHORITIES ARE THE FINANCIAL
INTELLIGENCE CENTER, ECONOMIC AND ORGANIZED CRIME OFFICE
(EOCO) AND THE DATA PROTECTION CENTER.
• THE ENABLING LEGISLATION FOR THE ABOVE INSTITUTIONS ARE:
• ANTI-MONEY LAUNDERING ACT 2008 ACT 749
• ANTI-TERRORISM ACT 2008 ACT 762 AND AS AMENDED IN
2014, BY ACT 875
• EOCO ACT 2010 ACT 804
• DATA PROTECTION ACT 2010 ACT 843
83
84. SUMMING UP
• FINANCIAL SECTOR COMPRISES:
• INSTITUTIONS
• MARKETS
• FINANCIAL INSTRUMENTS – AND PAYMENT AND SETTLEMENT SYSTEM FOR SETTLEMENT
OF OBLIGATIONS ON INSTRUMENTS
• THE GHANAIAN FINANCIAL SECTOR HAS GONE THROUGH TREMENDOUS EVOLUTION
SINCE COLONIAL TIMES
• THE CURRENT GHANAIAN FINANCIAL SECTOR AS IT IS TRACES ITS ROOTS TO THE
BANKING REFORMS OF THE LATE 1980S
• THE REFORMS AFTER THE RECENT CRISIS HAS FURTHER STRENGTHENED
INSTITUTIONS AND MARKETS WITH THE GOVERNMENT COMING UP WITH A HOST OF
DIRECTIVES TO ACHIEVE A ROBUST BANKING SECTOR.
• THE KEY CONCERNS OF GHANAIAN FINANCIAL INSTITUTIONS ARE NOW RAPID
CHANGES IN REGULATIONS AND INCREASED SPATE OF DIGITIZATION OF BANKING
OPERATIONS.
84
85. CONCLUSION
• MONEY IS THE BLOOD OF COMMERCE AND FINANCIAL INSTITUTIONS ARE AT
THE HEART OF EVERY ECONOMY
• FINANCIAL SERVICES IS A CRITICAL SERVICE AND VARIOUS MARKETS AND
INSTITUTIONS HAVE BEEN DEVELOPED TO PERFORM THIS SERVICE.
• IT IS A HIGHLY VOLATILE SECTOR WHICH UNATTENDED TO CAN LEAD TO
CHAOS IN THE ECONOMY
• IT IS FOR THIS REASON THAT THE SECTOR NEEDS A HIGH LEVEL OF REGULATION
• THE SECTOR CONTINUES TO EXPERIENCE VERY RAPID DEVELOPMENTS KEY
AMONGST WHICH INCLUDE RAPID CHANGES IN TECHNOLOGY, DIGITALIZATION
OF BANKING SERVICES AND ATTENDANT INCREASED REGULATION
• IT IS INCUMBENT ON SENIOR MANAGEMENT AND STAFF OF FINANCIAL
INSTITUTIONS TO BE ABREAST AND ADAPT TO THESE DEVELOPMENTS.
85