A SPEECH BY MR DELA SELORMEY, HEAD, BANKING SUPERVISION DEPT., BANK OF GHANA ON THE LAUNCHING OF THE 2009 FINANCIAL LITERACY WEEK AT THE NATIONAL THEATRE, ACCRA ON MONDAY 28TH SEPT., 2009

Mr. Chairman,
Honourable Deputy Minister of Finance and Economic Planning, Honourable Members of Parliament,
Heads of sister regulatory institutions,
The Press Corps,
Distinguished Ladies and Gentlemen,

It is my pleasure and honour to be part of the launching of the 2009 Financial Literacy Week, which is the second in the series. I am here this morning representing the Bank of Ghana which is the regulator of the banking system. The Bank of Ghana in performing its regulatory function has the mandate to ensure the safety and soundness of banks and this would be achieved if customers have a good understanding of the operations and product offerings of banks. This ceremony is an affirmation that the Financial Literacy Week has come to stay, to create the desired awareness among the general public. An understanding of the products and services of banks would bring more people into the banking fold to deepen financial intermediation, which would augur well for economic growth and development.

In 2008, the Financial Literacy Week was devoted to sensitizing the public on general banking products and services but with limited feedback. This year, the focus would still be on banking products and services but with relatively much time for public participation to ensure that issues in doubt are clarified and cleared. The activities would also highlight on measures instituted by the central bank to protect consumers, who constitute the bedrock for attaining a vibrant banking and financial system. The activities lined up include TV talk shows, radio discussions (on thirteen popular FM stations country-wide), public fora at six regional capitals and community fitness and sensitization walk. The celebration would be based on the following sub themes:

Deposit mobilization

Accessing credit and required conditions

Funds Transfer and Foreign Currency Inward Remittance Credit Reporting Act, 2004 (Highlights)

Borrowers and Lenders Act, 2008 (Highlights)

Role of the Consumer Reporting Office of the Banking Supervision Department, Bank of Ghana.

We expect that the public would avail themselves of the identified programme of activities in order to broaden their knowledge and skills in matters of banking and finance and in so doing assist them in the better management of their finances. Mr. Chairman, banking operations have become complex with the emergence of technology-based electronic products and services, including derivative products with complex risk implications. While the harnessing of technology has simplified life in some respects, what with removal of some drudgery such as carrying and counting loads of physical money, the elimination of person to person contact, the transformation of paper and currency (hard, visible evidence) into electronic, invisible evidence has had wide ramifications for how business is conducted. These developments have posed challenges for us all, literate and illiterate, young and old, plain simple or sophisticated, but more so for the older generation.

While this week's celebration will not address all the intricacies of the evolving banking and financial environment, it is the expectation of the Bank of Ghana that the activities of the Financial Literacy Week would expose the public to basic knowledge to empower them understand the financial market, its products and underlying risks and thereby stimulate public participation in banking and financial services.

The relationship that is established between banks and their customers is contractual, between a service provider and a client. However banking is very crucial to the economy such that it imperative to maintain confidence of the public in the banking system. The responsibility for ensuring public confidence has been assigned to the Bank of Ghana. The Bank of Ghana initiates the passage of laws and sets out arrangements for the monitoring of the operations and financial health of institutions that are licensed to do business as banks and non banks. The processes ensure that banks are adequately capitalized to undertake the types of businesses and their associated risks. The bank also assesses the effectiveness of the governance and internal controls and risk management systems that the bank has put in place to ensure that they are commensurate with the risk types and levels that the banks assume. In the process the Bank of Ghana has adopted international best practices for supervising banks and issues guidelines to institutions it regulates, on disclosure of information to the Banks and the public. For example, the annual financial accounts of banks are now published in accordance with International Financial Reporting standards which require high level disclosure. Banks also submit 18 different reports to Bank of Ghana including daily, weekly, monthly, quarterly, half¬-yearly and annual reports.

In addition, banks are required to publish their base rates in the print media and in other banking halls and to quote the total borrowing costs to their customers. Banks risk exposures to individuals and institutions are prescribed and set at a proportion of their capital. These measures are intended to ensure that banks are assuming and managing risks within their capabilities and the Bank of Ghana monitors them for compliance.

Mr. Chairman, I have attempted to highlight a broad range of issues that should set the tone for discussion during this week and into the future. Financial literacy is an everyday and continuous process and I do not expect discussions to stop after one week. Mr. Chairman, it is our expectation that the awareness created during the Financial Literacy Week would be sustained by the banks and licensed non-banks through programmes aimed at improving patronage of their products and services as well as enticing the un¬banked and under-banked segments of the populace.

Mr. Chairman, the Bank of Ghana acknowledges the role of the Ministry of Finance and Economic Planning and the financiers in organizing the programme and wishes all a successful Financial Literacy Week

Thank you for your attention.