Bank of Ghana suspends FX trading licences of GTB, FBN Bank Ghana

The Bank of Ghana has recently made headlines by suspending the FX trading licences of Guarantee Trust Bank and FBN Bank Ghana due to various infractions on foreign exchange market regulations. This move has sparked conversations about corporate governance and the challenges of international expansion for Nigerian banks. Nabila Mohammed, Banking Sector Analyst at Chapel Hill Denham, shed light on this topic during a recent interview on CNBC Africa. According to Mohammed, the suspensions were a result of regulatory infractions related to fraudulent documentation. Both banks have acknowledged the issue and are working towards resolving it. The circular released by the Bank of Ghana has raised questions about the corporate governance practices of these institutions. With subsidiaries in multiple African countries and the UK, the focus is on how well these banks adhere to rules and regulations in the various markets they operate in. Mohammed highlighted the importance of rigorous regulatory oversight in the forex trading sector, emphasizing the need for banks to comply with international standards to ensure market integrity. When discussing Ghana's regulatory strength compared to international best practices, Mohammed expressed confidence in the country's commitment to enforcing strict regulations in the forex trading space. Given the currency investigations and other challenges faced by Ghana in the FX market, it is expected that the rules Ghana imposes on businesses in this sector align with global standards. Mohammed also shared insights on the expansion strategies of Nigerian banks, particularly Tier 1 institutions like Access Bank and QB. Access Bank, known for its aggressive expansion approach, has been eyeing opportunities in various countries to diversify its business and mitigate forex volatilities. Similarly, other Tier 1 banks have made significant strides in expanding their footprint across different regions. Mohammed pointed out that while expansion is vital for growth, banks must also prioritize effective oversight of their subsidiaries in foreign markets. The recent suspensions serve as a reminder for banks to enhance their supervisory and monitoring mechanisms to prevent regulatory breaches in other jurisdictions. Investors are keen on understanding how Nigerian banks manage their international operations to maintain regulatory compliance and uphold corporate governance standards. As Nigerian banks continue to navigate global markets, the focus on governance, compliance, and risk management remains critical in ensuring sustainable growth and reputation.