Banks can hold electronic AGMs to satisfy BoG’s requirement – Banking Consultant
Nana Otuo Acheampong - Banking Consultant
Banks have been urged to organize their Annual General Meetings electronically to meet the Bank of Ghana’s (BoG) requirement of meeting shareholders every year.
Per the Banking Act, banks are expected to publish their statements of account and also hold Annual General Meetings with shareholders annually.
But with the imposition of a ban on public gathering as one of the measures to mitigate the spread of the coronavirus (COVID-19), banks are challenged on how to meet their shareholders.
Speaking in an interview, a Banking Consultant, Nana Otuo Acheampong has suggested that banks should hold their Annual General Meetings electronically through the internet to fulfil the Bank of Ghana’s requirement.
“The ban on public gathering which has been given under the certificate of urgency is like when you are in a war and everything stops and gets substituted. That is why they have to go and implement the Imposition of the Restriction Act passed by Parliament.”
“So, once the law is in place, then everything else is on hold and therefore it will include holding Annual General Meetings. No institution can hold an Annual General Meeting unless they are doing it electronically. Nobody can hold an AGM with a 1,000 or so shareholders. It’s all under the Imposition of Restriction Act,” he said.
In the wake of the Coronavirus pandemic, several businesses and organizations have been badly hit resulting in job losses, laying off staff members with some institutions having difficulty paying salaries.
This was after a three-week partial lockdown was earlier announced by the government, restricting movements in some parts of the country and impeded the ability of businesses to go about their normal duties.
Although the three-week partial lockdown has been lifted, the ban on public gathering, as well as the closure of the country’s borders which are still in force, means that businesses will not be able to run normal schedules; and also conferences cannot take place, thereby reducing revenue.
BoG hopeful its 5 major decisions due to COVID-19 will lessen impact on financial sector
Meanwhile, the Bank of Ghana (BoG) says it is hopeful the proactive measures it has taken so far to protect the financial sector from a possible shock from COVID-19 will yield results.
In the latest banking sector report published by the central bank, it noted that it has taken some 5 major decisions that will steady the financial sector against any burden from the coronavirus pandemic as well as protect depositors’ fund.
In the BoG’s report, it pointed out that the decision to lower Monetary Policy Rate by 150 basis points to 14.5 per cent is expected to reduce interest rates and help lessen the challenges in securing credit facilities at reasonable rates for individuals and businesses.
Also, the central bank is hopeful the reduction in Primary Reserve Requirements from 10 per cent to 8 per cent will extend and expand the coverage of channelling additional funds to support lending in all critical sectors of the economy including the informal sector.
Additionally, the Bank of Ghana is hopeful the reduction in prudential limit of Capital Adequacy Ratio from 13.0 per cent to 11.5 per cent will complement the reduction in primary reserves by helping to boost credit expansion to support the economy.
Furthermore, the report maintained that the reduction in provisions for loans in the “Other Loans Especially Mentioned” category from 10 per cent to 5 per cent could lessen the impact of the potential challenges of Non-Performing Loans on loan loss provisions and profit margins of banks.
And while the classification of loan repayments past due for Microfinance Institutions increased to 30 days as current, it will also help minimize the impact of loan repayment challenges on Microfinance Institutions.