President of the Chartered Institute of Bankers (CIB), Ghana Patricia Sappor, has said that a proper adherence to the Banking Code of Ethics and Business Conduct will go a long way to consolidate the gains realized after the financial sector cleanup and the subsequent confidence the public has reposed in the banking sector.
According to her, a comprehensive reform agenda initiated by the Bank of Ghana in 2017, with the objective of cleaning up the banking sector and strengthening the regulatory and supervisory framework for a more resilient banking sector has yielded positive returns.
For her, the recapitalization directive of the Bank of Ghana is one of the key pillars that has ensured a resilient, liquid, profitable and well capitalized sector with the industry’s capital adequacy ratio of 20 percent as at October 2020, well above the regulatory 13 percent prudential limit under the Basel II/ III framework; serving as good shock absorbers during these pandemic times.
She commended the Central Bank and the government for the timely intervention in putting in place monitoring mechanisms, policy measures and strategies when the COVID-19 pandemic broke out in the country.
“These measures, which included the reduction of the Primary Reserve Requirement from 10 percent to 8 percent and the holding of the policy rate at 14.5 percent, amongst others, helped to stimulate the economy and to a large extent has aided in stabilizing businesses and the industry in general,” Mrs. Sappor said at the 2020 Annual Bankers’ Dinner and launch of the Ghana Banking Code of Ethics and Business Conduct.
She said it was on the back of these gains that the Banking Code of Ethics and Business Conduct was developed by the Chartered Institute of Bankers, Ghana in collaboration with the Ghana Bankers Association and the Bank of Ghana.
The code is in line with Section 3 (d) of the Chartered Institute of Bankers Ghana Act, 2019 (Act 991) which reinforces the Institute’s mandate of setting standards and ensuring the observance of ethical standards and professional conduct among members of the banking profession in the country.
“The launch of this code is a timely and relevant milestone in the banking industry as it will serve as the bedrock and a guide to all practitioners to maintain best banking practices and strong commitment to sound ethical and professional standards in the banking industry. This will ensure that chartered bankers continue to play critical roles in the banking Industry and distinguish themselves on account of the significant contributions they make to the profession of banking as it is the only qualification customized to the core practice of banking,” Mrs. Sappor said.
The Code reinforces provisions made under Sections 18 (2) (d), 24 (1) (a) and the Third Schedule of Act 991. Thus, ensuring that all financial institution employees conduct their duties fairly, honestly and with integrity so as to uphold the mutual trust and public confidence bestowed upon them.
The effective implementation of the code will foster high levels of integrity, discipline and etiquette in the banks leading to improved confidence amongst customers and the general public. Ultimately, it will support the banks to mitigate reputational risk, enhance their corporate brands and reinforce sanity and stability of the banking industry.
Governor of the Bank of Ghana, Dr. Ernest Addison noted that the supervision of banks has been strengthened with systems and structures to identify, assess and proactively mitigate or manage vulnerabilities and threats to stability. He added that going forward, the financial sector will require constant regulatory and policy attention to mitigate the risks.
The Bank of Ghana, he noted, is putting greater focus on identifying the early warning signals and initiating prompt corrective action. “The symptoms of a weaker bank are usually poor asset quality, lack of profitability, loss of capital, excessive leverage, excessive risk exposure, poor conduct and liquidity concerns.”
He urged banks to be vigilant and upgrade their capabilities, improve governance and risk culture and “we are optimistic that with this approach, we will build a robust, resilient and capable financial sector to support Ghana’s beyond Aid Agenda.