For almost a year now, the industry has been buzzing with news of an imminent adoption of risk-based capital requirement. What this means is that the capital of each bank will be directly linked to the amount of risk inherent in the bank’s portfolio. To optimise capital requirement therefore, banks will have to be selective in the type of businesses and individuals to do business with.
Given that Ghana’s economy has a significant presence of micro and small scale private sector players, whose structures and operations are, predominantly, informal, what impact will the adoption of risk-based capital requirement banking and on economic growth?
We have engaged bank executives to seek their views on this imminent transformation in the banking industry.