BoG wants banks, others to be risk-averse

The Bank of Ghana (BoG) has directed all banks and other financial institutions to create risk management units that will ensure effective management of transaction related risks.
The regulator’s directive is to ensure that financial institutions have adequate risk management strategies commensurate with the risk profile of the business they wish to undertake.
The Assistant Director of Banking Supervision of the BoG, Mr Philip Cobbinah, who made this known, reiterated that it was imperative for financial institutions to have policies in place to support the management of the risks inherent in their lines of business.
The expansion in the financial services market comes along with increased risk, hence the need to develop a culture of vigilance and respect for internal controls within an organisation.
To control this risk, Mr Cobbinah suggested that management should assess the company’s overall risk profile, especially when the institution is expanding and ensure the adoption and management of strict control measures.
The directive was made known at the commissioning of the Tema Branch of First Capital Plus, an indigenous savings and loans company.
Risk management is an important part of every business activity as failure to manage risk efficiently could result in losses leading to decline profits, reputation, trust and confidence.
The regulator thus hinted that the BoG was fully committed to the viability and sustainability of the financial system in Ghana and to this end would ensure that financial institutions maintain adequate capital, adopt good credit organization and administration practices, robust treasury/liquidity management policies, good corporate governance and sound internal control measures.
“Thus one sure way of survival in Ghana`s competitive financial environment is for players to know and forge closer relationships with their customers,” he said.
The Chief Executive Officer of the company, Mr John Kofi Mensah, said the company is set to expand to other areas in the country in order to establish its presence.
He also hinted of plans to acquire a to acquire a universal banking license soon following the implementation of the requisite systems and structures necessary for its transition from a savings and loans company to a bank.GB