Banks announce 2% cut in interest rate on existing and new loans

Commercial banks in Ghana have announced a two per cent cut on cedi denominated loans as part of measures being taken to mitigate the financial impact of the deadly coronavirus on the public.

A statement issued Monday by the Ghana Association of Bankers said the banks have agreed “to a general 200 basis points interest rate cut on all existing local currency denominated loans and for all new loans to be sanctioned by member banks”.

This means customers who either have existing loans or applying for new loans will enjoy a two per cent cut on the prevailing interest rate of the various banks.

It indicated that the cut in interest rate will go beyond the period of the pandemic in order to give customers enough time get their businesses back on track after the deadly virus which is causing businesses to flounder.

“This rate cut shall cover not only the period of the pandemic but Banks recognise that it will take businesses and individuals sometime after the end of the pandemic to retool and restock to achieve the semblance of normalcy.

“The rate cut will therefore cover the remaining tenor of the facility,” it explained.

Expect more reprieve

Also, GAB has asked customers operating in worst affected industries to expect more reprieve as banks in Ghana prepare to hold bilateral discussions to agree on further packages.

“We recognize with concern the challenges some of our clients have had to go through during the pendency of the pandemic; to mention a few, we note real challenges facing the airlines and general transportation businesses; hotels and other tourism related businesses; importers/exporters and our clients who are staff of these worst affected businesses” it observed.

READ ALSO:  Second phase of vaccination to start on 19th May - GHS

On the back of that, it said banks have agreed to hold bi-lateral discussions with customers who have loan exposures with respective banks so a more tailor-made solution can be agreed with their bankers.

“We advise customers to exercise restraint during this exercise as delays may be expected as banks will be using existing lean staff on roll to begin individual discussions on loan extensions, restructuring or other solutions respective banks will proffer to lessen the impact the virus may have caused,” it urged.

Special loans

According to the Ghana Association of Bankers, their members will also offer special loans to manufacturers of pharmaceutical products during pandemic.

It said it is currently in final stages of discussions with the Bank of Ghana, the Finance Ministry and its member “to set up gross loans on preferential terms (details to be announced later) of up to GHS3 billion to pharmaceutical companies that decide to switch production lines”

That, GAB explained, will enable those manufacturers focus attention on critical medical equipment and to enhance capacity of existing plants.

“The finer details shall be announced in due course when discussions are complete,” it assured.

10 million support for Covid-19 fight

Meanwhile, the banks are offering 10 million cedis as donation to support the country’s fight against the deadly coronavirus which has infected over a million people globally and killed thousands of them.

The amount will go into a Covid-19 fund and used for the procurement of protective gears as well as support frontline medical personnel in residence.

READ ALSO:  TUC cautions gov't against going to IMF

It will also go into easing the burden and practical difficulties face by some vulnerable citizens who will have to endure due to the restriction of movement during the partial lockdown in parts of the country.

Ghana’s covid-19 situation

Ghana has recorded 214 covid-19 cases since the first two cases were confirmed in the country on March 12. Five of them who had underlying conditions have since died while three others have recovered.

Forty-nine others have been discharged for home management by health officials who say additional 155 others are doing “well and responding to treatment” across the country.

So far cases have been recorded in six of the `16 regions of the country with Greater Accra leading with 189 followed by the Ashanti Region with 12 cases, Northern Region with 10 cases, and one case each in the Upper West, Eastern and Upper East regions.

By Stephen Kwabena Effah|3news.com|Ghana