Financial Analyst and Banking Consultant, Dr. Richmond Atuahene has observed that the sudden surge in the foreign exchange act breaches by some commercial banks and fintechs is partly due to the regulatory lapses of the Bank of Ghana.
Dr. Atuahene maintains that the regulator cannot be absolved from this sudden surge in these breaches by the industry players since the Central Bank has relaxed its oversight role as supervisor, and therefore opening the floodgate for some banks and fintechs to cut corners in the foreign exchange trade.
The revocation of the foreign exchange trading licenses of some banks and fintechs has become relatively prevalent in recent times.
Among other offences, the Bank of Ghana in revocation of the licences mentioned breaches that are in contravention of the Updated Guidelines for Inward Remittance Service for Payment Service Providers and the Anti-Money Laundering/Combating the Financing of Terrorism & The Proliferation of Weapons of Mass Destruction (AML/CFT & P) Guidelines.
Some of the culprit institutions, according to The High Street Journal’s sources were sanctioned for trading forex outside the Bank of Ghana’s approved rate bands.
Commercial Banks sanctioned in recent times include the Consolidated Bank Ghana, (CBG), Fidelity Bank, First National Bank, GT Bank, and FBN Bank. Sources tell The High Street Journal that some other banks were sanctioned recently but went unnoticed to uphold sanctity and confidence in the banking sector.
Fintechs, including TapTap Send and Zeepay, have also been sanctioned for similar foreign exchange breaches at various times.
The revocation of licences of these banks and fintechs affects customers who are unable to access and transact foreign exchange business leading to frustration and desperation.
But Dr. Atuahene says the situation has become very prevalent due to the monitoring and supervision lapses of the regulator.
He tells The High Street Journal in an interview that the Central Bank lacks a robust system that can monitor and ensure that these financial sector players in the foreign exchange business are adhering to rules and regulations.
He further reveals that not only are customers frustrated when licences are suspended, but the breaches also lead to wrongful capture of remittances that enter the country.
“When you have licensed FinTech to go into these money transfers, how closely are you monitoring them? And if you are monitoring them, are those foreign currencies that these people have tracked and captured, are they actually coming into play in the nostrils of those banks that are supposed to have them? You fine them because they have made breaches,” he indicated.
“What Bank of Ghana should have done is they should have bought a central software to link all of the people who are doing this so that every transaction you make, we at the central bank will know the transaction. So we expect you to bring the dollar or the euro or the yen equivalent,”
He added that, “They were in breach of the Foreign Exchange Act 2723 Act 206. They were in breach because they did not comply with it. But who caused am? How come? They are not the first.”
Dr. Atuahene is therefore calling on the next administration to prioritize and reform the foreign exchange and remittance operations of the banks and fintechs. This he believes will enable efficient regulation and properly capture all remittances.
“The whole system of TapTap Send, the remittances in Fintech had to be looked at again. I think whoever is taking over, it’s another area that the new government should sit down and let experts come in to do it, to review. Are we getting the benefit of all remittances?” he added.
