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Bank of Ghana Suspends Consolidated Bank’s Forex Trading License for Regulatory Violations
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Bank of Ghana Suspends Consolidated Bank’s Forex License Over Regulatory Violations
In a decisive move to reinforce foreign exchange market compliance, the Bank of Ghana (BoG) has suspended the forex trading license of the Consolidated Bank of Ghana (CBG) for a period of one month.
The suspension, effective from November 26, 2024, follows CBG’s multiple breaches of foreign exchange market regulations, as detailed in a BoG notice issued on November 12.
This action is grounded in the Foreign Exchange Act, 2006 (Act 723), specifically section 11(2), which empowers the BoG to sanction institutions that fail to comply with established forex and anti-money laundering guidelines.
According to the BoG, the decision is temporary, with the possibility of license restoration contingent on CBG implementing effective regulatory controls.
Reasons Behind the Suspension
CBG’s suspension is linked to a series of non-compliances with BoG’s updated guidelines for the foreign exchange market, including the recent Guidelines for Inward Remittance Services for Payment Providers (November 2023) and the Anti-Money Laundering/Combating the Financing of Terrorism & Proliferation of Weapons of Mass Destruction (AML/CFT&P) Guidelines (December 2022).
These guidelines set forth standards for institutions to mitigate financial misconduct risks, ensure transaction transparency, and adhere to responsible financial practices.
In its notice, signed by BoG Secretary Sandra Thompson, the Bank emphasized that adherence to these guidelines is crucial for protecting the financial market from illegal activities, including money laundering and terrorism financing. The suspension is expected to prompt CBG to implement stronger compliance protocols.
Implications and Future Compliance Measures
Under the terms of the suspension, CBG is required to address the regulatory gaps identified by BoG. If the Bank of Ghana is satisfied with CBG’s corrective actions, the forex trading license will be restored at the end of the suspension period on December 26, 2024.
This compliance-focused move is part of BoG’s broader effort to ensure that financial institutions operating in Ghana adhere to both local and international regulatory standards.
The BoG also issued a general reminder to other foreign exchange market participants to strictly comply with all applicable regulations and guidelines to avoid similar disciplinary actions.
This reminder underscores the importance BoG places on maintaining stability and integrity in Ghana’s financial system.
Industry Reactions and Next Steps
The suspension has raised awareness across Ghana’s financial sector, where many institutions are evaluating their own compliance strategies to avoid potential sanctions.
Market analysts suggest that this suspension could serve as a wake-up call for other financial players in Ghana, pushing them to re-assess their risk management and compliance frameworks, particularly concerning foreign exchange operations.
As the BoG awaits CBG’s corrective measures, the financial sector is closely watching how this enforcement action impacts broader market operations and regulatory adherence.
Source:
Ghana Insights