The Bank of Ghana has advised Licensed Dealer Banks that the renewal and continued validity of their Foreign Exchange Trading Licenses shall be contingent upon demonstrable and sustained compliance with applicable regulatory requirements and internal control standards.
Accordingly, institutions are required to ensure, at a minimum, that the following measures are effectively implemented and consistently enforced.
The measures include the implementation of robust verification protocols for all foreign currency transfer instructions, including multi-tier authorization structures and comprehensive customer identification and validation procedures as well as the maintenance of a clear and effective segregation of duties among officers responsible for the initiation, processing, approval and execution of foreign currency transactions, to mitigate operational risks including fraud.
Others are subjecting foreign currency transactions to appropriate Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) checks, with all suspicious activities promptly reported; periodic internal audits to assess compliance with foreign currency transfer procedures and the conduct of regular training and capacity-building programmees to ensure that frontline, operations, and back- office staff remain fully conversant with regulatory requirements and internal operational procedures relating to foreign currency transactions.
In a statement, the Central Bank said failure to comply with the above directives constitutes a breach of prudential and foreign exchange regulations and may attract sanctions in accordance with the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) and the Foreign Exchange Act, 2006 (Act 723).
The Central Bank expects the full cooperation of all Licensed Dealer Banks in ensuring strict compliance with these directives in order to preserve the credibility, integrity, and stability of Ghana’s financial system.
The Bank of Ghana has through recent supervisory examinations and market surveillance activities, identified material weaknesses, lapses, and inconsistencies in the internal control procedures governing the initiation, processing, and reporting of foreign currency transfers in some Licensed Dealer Banks. These deficiencies heightened operational and reputational risks, including increased vulnerability to fraud and financial crime, and undermines the integrity and orderly functioning of Ghana’s Foreign Exchange Market.
In line with its statutory mandate to ensure a sound and stable financial system, it reminded all licensed Dealer Banks and directed them to strengthen and strictly adhere to their established internal control frameworks for the management of foreign currency transactions, including inward and outward transfers.
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