Source: newsthemegh.com
Claims that the nation has lost $8 billion over the last two years as a result of money transfer operators (MTOs) and financial technology businesses (FinTechs) withholding cash have been categorically denied by the Bank of Ghana (BoG).
In response to recent media discussions about the role that Money Transfer Operators (MTOs) and Financial Technology companies (FinTechs) play in Ghana’s inward remittance services, the Bank released a statement in which it asserted that the operations of these entities have resulted in significant foreign exchange losses for the nation.
“This claim is misleading and not grounded on facts,” the bank declared, stressing that all remittance inflows are duly recorded via the banking system.
The statement cites data from the World Bank and the Bank of Ghana as proof that remittance inflows to Ghana have been rising year over year.
With the statement, “The Bank of Ghana does not licence MTOs since such companies are based abroad,” the central bank made clear what its regulatory responsibility is. As part of the authorization process, we do due diligence on MTOs that collaborate with regional banks and/or FinTechs to send money to Ghana.
BoG described the remittance flow mechanism, emphasizing that all incoming remittances are credited to the Payment Service Providers’ (PSPs’) partner banks’ nostro accounts.
The bank confirmed, “No PSP holds any forex inflows from inward remittances. The partner bank credits the local cedi accounts of PSPs for onward transfer to beneficiaries.”
In response to public worries regarding regulatory oversight, the Bank of Ghana (BoG) assured them that regular prudential returns are a mandatory requirement for both banks and FinTechs offering inward remittance services.
In response to technological innovation, the Bank declared, “We continue to evolve our regulatory framework to remain relevant and effective in the face of technological advancement”.
The Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements must be complied with by all firms providing remittance services, the central bank stated, rejecting charges of running two foreign exchange systems.
The BoG released the Updated inbound Remittance Guidelines in November 2023, which give Payment Service Providers a framework for working with local banks and MTOs to terminate inbound payments.
These rules are intended to supplement the role that banks play in providing remittance services by giving Ghanaians access to alternative channels for receiving remittances from abroad, such as mobile money wallets.
The BoG emphasized that FinTechs are solely involved in inbound transactions when it comes to remittance services.
The bank elucidated, “It is important to note that these authorisations for PSPs are restricted to inward remittance services only, without any involvement in outbound remittance services,”
BoG addressed worries about data collecting by saying, “The authorisation of FinTechs to engage in remittances has not in any way complicated data collection and analysis.
The engagement of MTOs, either by a bank or a FinTech, requires authorisation from the Bank of Ghana”.
The BoG’s announcement coincides with remittances’ growing economic significance in Ghana.
The central bank hopes to promote confidence in the nation’s financial system and sustain growth in remittance inflows by providing clarification on regulatory procedures and dispelling false information.