BoG revokes licences of two forex bureaus in Accra

The Bank of Ghana (BoG) is taking significant steps to restore macroeconomic stability through major monetary and exchange rate policy changes, on the back of approval for a 36-month arrangement under the International Monetary Fund's (IMF) US$3billion Extended Credit Facility (ECF).

The Bank of Ghana has revoked the licences of two forex bureaus operating in Accra for several breaches of the Forex Bureau Act.

The two companies – Trade House Forex Bureau Ltd. and Aiport City Forex Bureau Ltd. – which are under the same ownership, according to Head of Other Financial Institutions Supervision Department at the Bank of Ghana, Yaw Sapong; and they are not complying with some provisions under the law within which they operate.

Mr. Sapong mentioned that the two forex bureaus which operate at Airport City in Accra were not issuing electronic receipts, and not taking identity cards of customers.

“There are several rules under the Act. We know that you have to issue electronic receipts, you have to take IDs; and these two forex bureaus on several occasions have been found not to be complying. And the way they operate and set their prices is detrimental, so we think the two bureaus’ licences must be revoked,” he said in an interview with media during the clampdown exercise.

Asked whether the two forex bureaus can have their licences back after correcting their mistake, Mr. Sapong said that may be difficult as the company’s directors and owners, per their actions, have proven themselves not to be fit and proper to qualify for operating in the forex space.

He further cautioned that the regulator will not relent in its efforts to carry out any action that will help address the cedi’s rapid depreciation.

“We are confronting the issues from all angles. There are licenced forex bureaus which are not operating according to the law. So, for licenced institutions which are not complying with the rules, the Bank of Ghana will deal with them. In addition, we are going after the black market as well; and as you are aware, we recently did a swoop and several more have been planned.

“So, I want to use this opportunity to sound a warning to those who are engaged in illegal forex business. It is an offence to buy or sell foreign currency in this country without a licence,” he said.

Asked whether this is just a panic-reaction in response to the cedi’s rapid depreciation against the dollar – which hit more than 50 percent this week, Mr. Sapong answered in the contrary: saying the regulator cannot watch on for the black market to set the rules in the forex industry. “We cannot allow the black market operators to set the value of currency in this country. And that is why we are fighting them really hard,” he said.

The position of the law

Section 3. (1) of the Foreign Exchange Act, 2006 (Act 723) states that: “A person shall not engage in the business of dealing in foreign exchange without a licence”. And Section 29 (1a) says: “A person who engages in the business of dealing in foreign exchange without a licence commits an offence, and is liable on summary conviction to a fine of not more than seven hundred penalty units or a term of imprisonment of not more than eighteen months, or both”.

Also, Section 1 (i & ii) of the Revised Forex Bureau Regulations, 2003 (BoG NOTICE NO. BG/GOV/SEC/2003/2) states that: “No person shall carry on any forex bureau business unless he/she is in possession of a valid forex bureau licence. A person who contravenes or fails to comply shall be guilty of an offence, and shall be dealt with in accordance with the law”.

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