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With globalization, development in IT and monetary liberalization, many nations have seen penetration of overseas banks into their banking business. On this matter, Ghana will not be an exception. Ghana is situated in West Africa and shares borders with three francophone countries- Togo (East), Cote D’ Ivoire (West), Burkina Faso (North), and south is the North Atlantic Ocean. The nation is blessed with pure assets.
Ghana is seeing super development in her banking system. This development is marked by enhance in branches, enhance in financial institution measurement and use of IT to supply providers to purchasers. Contributing to this development is modifications in regulation and supervision and development in Data Expertise. Of the 26 banks working within the nation, 25 of them are working as common banks, and one working as each offshore and common financial institution. The presence of overseas banks within the nation exceeds the presence of home banks. Out of the 26 banks, 14 and 12 are overseas and native banks respectively.
Globally, many elements affect their entry into host nations. These elements have been recognized as location-specific benefits of the host nation (e.g. inhabitants measurement, safety, market construction and regulatory construction), ownership-specific benefits of the overseas financial institution (e.g. branding, creditworthiness, measurement of purchasers, expert work pressure) and internalization-specific benefit. These elements mixed collectively affect the entry motive choices, entry mode choices, market orientation resolution and administration management resolution of those banks. Thus, the entry into Ghana is influenced by these elements.
Their entry in Ghana dates again to the colonial period. The primary entry was in 1896 by the Financial institution of British West Africa (BBWA), now often known as Normal Chartered Financial institution (SCB). Its principal object was to import silver cash from the Royal Mint to expatriate corporations and the colonial administration. Within the colonial period, the banking business was established with the article of offering monetary providers for the British buying and selling enterprises and the British Colonial Administrative. For this causes the native folks within the Gold Coast have been financially excluded from the banking system.
In 1917, one other overseas department was included within the nation. That is the Barclays Financial institution, which was then often known as Barclays Dominion, Colonial and Abroad Financial institution. This introduction elevated the presence of overseas banks to 2, with indigenous banks absent. In 1975, SSB Financial institution was additionally included. Monetary liberalization within the 80s and its deepening within the 90s noticed the entry of latest banks into the business. From 1990-2000, 4 overseas banks entered the banking system, thus growing the presence of overseas banks to seven. In contrast to the earlier years, seven information banks have been included from 2004 to 2010.
Regulating their entry is the duty of the Central Financial institution. Their entry modes into the nation are by means of acquisition, subsidiary and three way partnership. Earlier than the issuance of banking license the next are legally required to be submitted by banks: 1. Draft by legal guidelines 2. Meant organizational chart 3. Monetary projection for the primary 5 years and space of specialization supposed. 4. Monetary data on principal potential shareholders 5. Background/expertise of future administrators and managers. 6. Sources of funds to be disbursed within the capitalization of latest banks. 7. Market differentiation supposed for the brand new financial institution. The license might be revoked by the central financial institution on the account of false, or deceptive or inaccurate data by or on behalf of the applicant financial institution; noncompliance with phrases and situations stipulated within the license, and failure of financial institution to start enterprise inside one yr from the date the license was issued.
Although their entry is crucial for a aggressive banking, their extreme numbers may result in macroeconomic instability and unstable authorized framework. For this causes, the Central Financial institution has adopted an open however selective licensing insurance policies to control their entry.
In conclusion, entry of overseas banks in Ghana dates again to the colonial period. Time of entry varies from one financial institution to the opposite. Entry is selective and consciously managed. Entry modes are restricted to joint ventures, subsidiary and acquisition.
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Source by Anoff Emmanuel
