The Bank of Ghana has approved a loan of GH¢1.2 billion for the banking industry. The move is to reduce the Non Performing Loan (NPL) significantly to 18.4%.
At a meeting with journalists in Accra, the Governor and chairman of the Monitory Policy Committee, Dr. Ernest Addison disclosed that, the waited interbank rate, that is, the rate at which Commercial bank lend among themselves declined further to 16.2% in August 2018 from 21% a year ago.
The average lending rate of banks also declined to 27% in August 2018 from 29.8% in August 2017.
He further explained that, the banking sector continues to be sound, profitable and well capitalized with total assets increasing by 39.7% to 44.2 billion cedis in July 2018, of the total advances constituting 45.8% per Industrial Capital Adequacy ratio of 19.1% which is significantly above the prudential requirement of 10%.
“Banks reduce their operation expenses in response to decline in both interest and non-interest income. The Quality of loans have improved, as industry Non Performing Loan(NPL) ratio is 21.3% in August 2018 from 21.9% for the corresponding period in 2017” he noted.
Story by: Mavis Arthur and Maryam Hassan