The Bank of Ghana has directed banks and Specialized Deposits Taking Institutions to desist from declaring or paying dividends as well as making other distributions to shareholders for the financial years 2019 and 2020 respectively.
According to the Central Bank, unless it is satisfied that such institutions met the regular prudential requirements and were not relying on the additional liquidity released by the regulatory reliefs provided, it will not sanction declaration of such dividends.
The regulator however indicated that it would continue to monitor the evolving impact of the COVID-19 pandemic on banks and SDIs and on their customers, and would issue further directives as required.
For the avoidance of doubt, the BoG said shareholders in this context means holders of Common Equity Shares (CET1) and Additional Tier I (AT1) capital instruments of banks and SDIs.
On 8 March 2020, the Bank of Ghana issued some measures to contain the impact of the COVID-19 pandemic.
This included the reduction of the limit for the primary reserves of banks from 10% to 8%.