BoG refutes allegations of losing US$8 Billion due to FinTechs and MTOs withholding foreign currency reserves

June 25, 2024
BoG refutes allegations of losing US$8 Billion due to FinTechs and MTOs withholding foreign currency reserves

The (BoG) has refuted the assertion that Ghana lost US$8 Billion in the last two years due to FinTechs and Money Transfer Operators (MTO)s withholding the country's foreign currency reserves.

It said that the media assertion was misleading and not grounded on facts.

“All remittance inflows are credited to the nostro account of partner banks of Payment Service Providers (PSPs), as such, no PSP holds any forex inflows from inward remittances. The partner bank credits the local accounts of PSPs for onward transfer to beneficiaries,” the Central Bank noted in a statement.

It noted that the country had seen a consistent increase in remittance inflows year-on-year though the Bank of Ghana “does not license MTOs since they are based abroad.”

The Bank, however, said it conducted due diligence on MTOs, who partner local banks and/or FinTechs to deliver remittances into Ghana as part of the authorisation process.

As part of regulatory obligations, the central bank noted that both banks and FinTechs engaged in inward remittance services regularly submit prudential returns to the BoG.

“Banks and FinTechs have the responsibility of complying with the Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements.
The Bank collects data on inward remittances from all licensed institutions and undertakes regular surveillance activities to identify any illegal operations in the remittance ecosystem,” the statement highlighted.

It also refuted the assertion that PSPs and MTOs were supposed to operate two accounts thus, remittance inflow settlement account and local settlement account, without recourse to their Nostro accounts.

“The statement is grossly inaccurate. Section 7 (1)c of Bank of Ghana's Updated Inward Remittance Guidelines for Payment Service Providers (2023) clearly mandates PSPs involved in inward remittance termination to ensure partner MTOs credit remittance proceeds to nostro account of the partner banks for onward credit to a cedi settlement account.”

It further explained that “it also stipulates that all funds terminated should be reconciled and matched within 72 hours.”

“The Bank, however, noted that under the 2021 Guidelines mentioned above, whereas PSPs were allowed to maintain a remittance inflow settlement account and local settlement account, all inflows were routed through the nostro accounts of their partner banks,” the statement added.

Latest from Economy