Banks cut interest rates, donate GH¢10m towards COVID-19 fight
Banks operating in the country have voted GH¢10 million to support the fight against the COVID-19 pandemic in the country.
They have also agreed to a general 200 basis points (two percentage points) interest rate cut on all existing local currency denominated loans and for all new loans to be sanctioned by member banks of the Ghana Association of Bankers (GAB).
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The banks are to hold bi-lateral discussions on further reprieves to customers operating in worst affected industries.
Statement
A statement issued in Accra and signed by the Chief Executive Officer (CEO) of the Ghana Association of Bankers (GAB), Mr D. K. Mensah, said the measure formed part of additional interventions by the banks to mitigate the financial impact of the coronavirus disease (COVID-19) on the general public.
Donation
The statement said the donation would go directly towards the procurement of personal protective equipment (PPE) for managing the virus, support to frontline medical staff in residence and also ease the burden and practical difficulties some of the vulnerable citizens had to endure during this period of restriction in movement.
Interest rate cut
The statement said the cut in interest rate would cover not only the period of the pandemic but banks also recognised that it would take businesses and individuals some time after the pandemic to retool and restock to achieve the semblance of normalcy, hence the rate cut would cover the remaining tenor of the facility.
Digital banking
It said the banks had already either reduced or removed completely charges on digital banking platforms.
Special loans
“GAB is in the final stages of discussions with our regulator (the Bank of Ghana), the Finance Ministry and member banks to set up gross loans on preferential terms (details to be announced later) of up to GH¢3 billion to pharmaceutical companies that decide to switch production lines to enable them to focus attention on critical medical equipment or to enhance capacity of existing plants,” it added.
Financial services
According to GAB, operators in the financial services industry would continue to monitor the impact of the coronavirus on global health systems, supply chains and the general way of life and, in particular, the strain on health systems in the country.
“GAB recognises that unusual circumstances call for response in unusual manner and, therefore, fully associate and urge compliance with the guidelines issued by the World Health Organisation, the Ghana Health Service and the President to stem the spread trajectory of the virus,” it said.
The association also said its members recognised with concern the challenges some of the clients had to go through during the pandemic, saying, to mention a few, “we note real challenges facing the airlines and general transportation businesses; hotels and other tourism related businesses; importers/exporters and our clients who are staff of these worst affected businesses”.
Service provider
The statement said as the President, Nana Addo Dankwa Akufo-Addo, announced, as an essential service provider, banks viewed the call to duty as a service to country in times of need.
“As has been witnessed elsewhere, sustained contraction should be avoided to lessen the pain of any consequential economic downturn and we are ready to play our part in that regard”, it said.
The statement added that during this period of medical crises with significant economic implications, the GAB would do whatever it could to make the transition as less painful as possible.
GAB
The Ghana Association of Bankers is the country's leading mouthpiece for the universal banking sector, currently representing the interests of 23 member banks.
At its inception on May 29, 1980, there were seven universal banks as against the current figure of 23.
GAB supports and promotes policies and initiatives that balance both the interests of banks and the wider public’s benefits.