Customers who rely on Consolidated Bank Ghana (CBG) for their forex exchange needs may have to find other alternatives as the Bank of Ghana (BoG) has suspended the forex trading license of the bank.
This suspension comes as part of the Central Banks’ effort to crack down on financial institutions and fintechs that are violating the country’s foreign exchange laws.
Already remittance platform, TapTap Send has been sanctioned by the BoG for also violating the foreign exchange laws.
A statement published by the Central Bank disclosed that the suspension of CBG’s forex trading license is per Section 11 (2) of the Foreign Exchange Act, 2006, Act 723. The sanction, the bank says will take effect on November 26, 2024, and it is expected to span a period of one month.
CBG has been accused of breaching the Guidelines for Inward Remittance Services for Payment Service Providers, the Anti-Money Laundering/Combating Financing of Terrorism & the Proliferation of Weapons of Mass Destruction Guidelines.
“The license will be restored at the end of the one-month suspension period once the Bank of Ghana is satisfied that CBG has put in place effective controls to ensure strict adherence to the foreign exchange market regulations,” portions of the BoG notice.
The regulator is also cautioning all players in the forex trading space to adhere to the regulations of the market in order to avoid the sanctions of the Central Bank.
This suspension, experts say will have several implications for the local bank. Apart from damaging the bank’s reputation among clients and partners, a crucial revenue stream for the bank has also been plugged.
The bank will have to swiftly implement corrective measures to restore compliance, potentially incurring additional operational costs and diverting resources to address these regulatory breaches.
Moreover, for businesses and individuals who rely on the bank for forex services such as international trade transactions, remittances, and foreign currency accounts, the suspension could cause significant disruptions. They may face delays or be forced to seek alternative banks for their forex needs, potentially at a higher cost.
This temporary limitation could also erode customer trust in the bank’s reliability, prompting some to reconsider their banking relationships, especially if the issues are not swiftly resolved.
