24 December 2010

Gambia: 'Only Eight Banks Meet the Capital Requirements of CBG'

Abdou Kolley, the minister of Finance has revealed that the latest assessment on banking operations in the country indicates that only eight out of the 14 banks in the country have met the capital requirement of D150 million. He added that the remaining six are being rigorously monitored by the Central Bank of the Gambia (CBG).

The Finance minister made this revelation recently while presenting the 2011 budget to the National Assembly. He said that two years ago, CBG raised the minimum capital requirement of commercial banks to D150 million and D200 million to be observed by the end December 2010 and 2012 respectively in order to strengthen The Gambia's banking system. Minister Kolley further stated that CBG is resolved not to grant request for forbearance if a bank fails to meet the requirement and to mitigate systematic risk that may arise from the revocation of a banking licence.

"The Central Bank shall invoke Section 45 of the Banking Act 2009 and take over the bank, thereafter, the Central Bank may invoke Sections 48 and 51 of the Banking Act 2009 and place the institution in conservatorship to be sold, merged or restructured and apply to the high court for compulsory liquidation under Section 52 of the Banking Act as a last resort," he explained.

According to him, as at end July 2010, bank deposits increased by 21.5 percent over a year."Time and demand deposit grew by 42.2 percent and 11.1 percent respectively and savings deposits grew by 15.6 percent," he said. He then confirmed that despite pressures on the banks' operational and funding costs which eroded banks' profitability, the banking industry continues to show increasing signs of resilience with growth in assets, capital and reserves. "The industry's total assets increased to D15.6 billion in June 2010, up by 18.4 percent over a year and the asset quality is satisfactory," he concluded.

Copyright © 2010 The Daily Observer. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.