In banking semantics, 'bank runs' are periods when customers engage in massive withdrawals from their savings often triggered by anticipated insolvency of banks. Ghana is not about to experience 'bank runs' any moment from now; it is the opposite that is rather happening. Banks are now running on customers and are trying to persuade them to open accounts with them or take loans. Unlike in the past when those who went round offices were selling goods, these days it is common to see neatly dressed men and women wielding briefcases poping into offices with long lists of banking prod¬ucts on offer. Salaried workers have become the new target because their salaries are used as collateral security for the loans. One official from one of the multi-national banks told this reporter that they were compelled to scout for customers because of the trillions of cash sitting in the tills which they have to dispose off, if they are to make returns on them each year. At the launch of the Ghana Commercial Bank's MoneyGram service in Accra recently, the Deputy Governor of the Bank of Ghana, Dr. Mahamadu Bawumia said the quality of loan portfolio of the banking system continues to improve. He added that the abolition of the secondary reserve and the improved capital levels of the banks have led to increased access to credit. "Today, many people are experiencing a different culture where banks are pursuing people to their homes, offices and funeral grounds to offer them loans", he said. But behind the deals are massive rip-offs by way of actual interests charged and interest deductions each month ending. A number of customers of various banks have been complaining about double deductions by machines that were programmed to make automatic deductions, besides other unannounced charges. On the sidelines are mushrooming savings and loans companies which are engaged in all kinds of non-banking practices amounting to bilking their customers out of several thousands of new Ghana cedis. Looking at it differently, the scramble for savings and the granting of loans has become a keen competition between the traditional commercial banks and savings and loans companies. That some established banks are now chasing small-scale savers at the markets is ample proof of the emerging competition in the banking industry. A report released in August this by Pricewaterhouse Cooper and the Ghana Association of Bankers found that the profitability levels of the banks have begun to drop over the last years. According to thepol1, net interest margin for the industry fell marginally from 10.8 percent in 2002 to 10 percent in 2006, in spite of interest expenses falling as a percentage of interest income over the survey period. The report attributed the drop in industry profitability to the reduction in lending rates due to keen competition among the commercial banks and also savings and loans companies. The question is wouldn't bank failures occur when banks tie up nearly all their assets in loans? In spite of what clearly appears as the proliferations of banks, the Bank of Ghana (BoG) has announced plans to grant universal banking licences to savings and loans companies. Officially there are 22 commercial banks in Ghana making it a ratio of about million people to a bank in Ghana, if say the population is22 million. On the contrary, with a population of more than 140 million people Nigeria has moved to consolidate its banking sector, reducing the number from 59 to 24. This was the result of a hike in the operating capital of commercial banks. Last week the Deputy Governor of the Bank of Ghana, Dr. Bawumia said on radio that the BoG had no plans to increase the operating capital to compel banks into mergers and acquisitions as was the case in Nigeria. Consolidation is perhaps, the reason Standard Bank of South Africa is leading the pack of banks offering to acquire ADB. One financial analyst thinks that despite what appears as the proliferation of banks, there is a big market out there; the problem is how to access the market. That perhaps, is why banks are increasingly turning to micro finance lenders and savers. Source: Public Agenda