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Eight Money Transfer Firms in Ghana Operating Without Central Bank’s Approval

Unlicensed Money Transfer Organizations Identified by Ghana’s Central Bank

Recently, The Bank of Ghana shed light on the operations of eight money transfer companies functioning without the required permission in the nation’s forex market and remittances. The central bank cautioned both the public and certified financial firms to exercise caution when dealing with these pop-up firms.

Non-Compliance with the Foreign Exchange Act’s Guidelines

The Bank of Ghana (BOG) detected that eight money transfer organizations (MTOs) were illegally functioning in the nation’s remittances and forex sectors. The implicated organizations include Lemfi, Wise, Transfer Go, Xoom-A Paypal Service, Sendvalu, Boss Revolution, BTC-AZA Finance, and Supersonicz. In the issued notification, each of these had been found breaching Section 3.1 of the Foreign Exchange Act, 2006 (Act 723). The law states that businesses must have the appropriate license to deal in foreign exchange.

The Act’s section 15.3 prescribes that any foreign exchange movement in and out of Ghana must be executed by licensed persons. The central bank stressed the need for authorized MTOs to follow the regulations of their specific licenses at all times. These companies were advised to channel their foreign exchange flows strictly via their associate institutions.

Turbulence in Ghana’s Foreign Exchange Market

Resembling the situation in numerous African nations, Ghana too is wrestling an official market foreign exchange deficit. The insufficiency is not only putting pressure on the local currency’s exchange rate with the U.S. dollar but is also igniting inflation. In 2022, the Ghanaian cedi was one of the worst-performing currencies, globally.

To mitigate the issue of forex scarcity, Ghana’s financial authorities have implemented multiple strategies to curtail the forex parallel market’s impact on the economy. They’ve put suspensions on licenses of numerous financial institutions found disobeying the law.

Ghana’s central bank recently imposed a penalty and briefly suspended Zeepay Ghana Limited’s forex license from 27th November 2023 to 8th December 2023 in an action against supposedly disobedient institutions.

How the Bitcoin Billionaire App Can Make a Difference

Despite the complex foreign exchange landscape, there are still business opportunities available in the digital currency landscape, like Bitcoin. The Bitcoin Billionaire app, designed for traders at all levels, is a secure gateway to this ecosystem. It provides reliable and transparent bitcoin trading with its cutting-edge features. This app helps users execute hassle-free bitcoin transactions, thus bypassing the traditional bottlenecks of foreign exchange.

Frequently asked Questions

1. Why is it important for money transfer firms to have the Central Bank’s approval?

Answer: Money transfer firms need the Central Bank’s approval to ensure transparency, legality, and financial stability in the country’s financial system. The approval process evaluates the firm’s compliance with anti-money laundering regulations, customer protection measures, and safeguards against illicit financial activities.

2. How can money transfer firms operate without the Central Bank’s approval in Ghana?

Answer: Money transfer firms operating without the Central Bank’s approval in Ghana may exploit regulatory loopholes or engage in illegal activities. These firms typically bypass the necessary due diligence procedures and regulatory oversight, which poses significant risks to customers, the financial system, and the economy as a whole.

3. What are the potential risks associated with using money transfer firms operating without approval?

Answer: Using money transfer firms without the Central Bank’s approval can expose customers to various risks, including potential fraudulent activities, inadequate customer protection, lack of dispute resolution mechanisms, and possible links to money laundering, terrorism financing, or other illicit financial practices.

4. How can customers identify money transfer firms operating without the Central Bank’s approval?

Answer: Customers can identify money transfer firms operating without the Central Bank’s approval by conducting thorough research and due diligence. They should check the Central Bank’s official list of approved firms and verify the licensing status of any potential service provider before initiating any transactions.

5. What actions can the Central Bank take against money transfer firms operating without approval?

Answer: The Central Bank has the authority to take various actions against money transfer firms operating without approval. These can include issuing warnings, imposing penalties or fines, revoking licenses, initiating legal proceedings, and collaborating with other law enforcement agencies to shut down illegal operations.

6. How does the operation of unauthorized money transfer firms impact Ghana’s economy?

Answer: The operation of unauthorized money transfer firms in Ghana can have detrimental effects on the economy. It can lead to the outflow of funds, tax evasion, reduced foreign exchange reserves, and potential destabilization of the financial sector. Additionally, it undermines the government’s efforts to regulate and monitor the flow of money, hindering economic growth and development.

7. What measures can customers take to ensure the legitimacy of money transfer firms?

Answer: Customers can take several measures to ensure the legitimacy of money transfer firms. These include verifying the firm’s registration and licensing with the Central Bank, reading customer reviews and feedback online, checking for any regulatory warnings or alerts about the firm, and seeking recommendations from trusted individuals or financial advisors. It is essential to prioritize safety, security, and compliance when choosing a money transfer service provider.