By Grace Zigah
Ghana’s central bank is drawing a red line in the sand for commercial banks, warning that malpractice, poor governance, and regulatory evasion will no longer be tolerated.
In a no-nonsense post-Monetary Policy Committee (MPC) address on Tuesday, Governor of the Bank of Ghana (BoG), Dr. Johnson P. Asiama, rolled out a sweeping package of reforms to clean up lending practices, restore trust in digital financial services, and reinforce local decision-making authority in the banking sector.
While maintaining the policy rate at 28 percent, the Governor used the platform to unveil an assertive shift toward regulatory enforcement, insisting that the financial sector’s next chapter must be marked by “discipline, fairness, and accountability.”
The policy rate was kept unchanged at 28 percent, a decision Dr. Asiama said was necessary to preserve recent gains in macroeconomic stability. Inflation dropped to 21.2 percent in April—down from historic highs—while the cedi rebounded by over 24 percent against the dollar since January.
“We are not loosening prematurely,” the Governor cautioned, stating that the disinflation process is still ongoing and could reach the target range by the first quarter of 2026. “Now is the time for consistency, not complacency.”
But while monetary policy remains steady, the central bank is taking a more aggressive stance on banking conduct and risk management.
Targeting Bad Behaviour
At the center of Dr. Asiama’s remarks were five new regulatory measures designed to clamp down on irresponsible practices in Ghana’s banking system.
These directives, he made clear, are non-negotiable—and banks must comply or face consequences.
1. Cash Reserve Realignment Starts This Week
Starting June 5, banks must match their cash reserves to the currency of the deposits they hold—cedi reserves for cedi deposits, foreign reserves for FX deposits.
The move is designed to reduce currency mismatches and enhance liquidity management discipline.
It follows widespread concerns over distortions in the dynamic Cash Reserve Ratio (CRR) regime, which some banks argued injected instability into the system.
2. Hidden Fees and Unethical Charges Under Fire
BoG is setting a 2% cap on Optional Issuer Fees (OIFs) for cross-currency card transactions, while also mandating that banks disclose all fees to customers before they complete transactions.
More damning, however, was the Bank’s rebuke of some banks that continue to charge interest on inactive credit accounts—sometimes causing the interest to exceed the original loan amount.
Dr. Asiama called the practice “unacceptable,” warning that such distortions of credit terms undermine trust and could trigger regulatory penalties.
3. Digital Lenders Put on Notice
With reports of intimidation, fee scams, and privacy breaches flooding in from digital loan users, the BoG is moving to regulate the fast-growing online lending space.
New guidelines to be released in August 2025 will introduce strict rules around licensing, interest rate transparency, data use, and ethical debt collection.
“This cannot continue,” Dr. Asiama declared. “We will protect the vulnerable from exploitation and bring rogue actors into compliance—or out of business.”
4. High NPLs to Trigger Forced Write-Offs and Sanctions
In a bid to address persistently high Non-Performing Loans (NPLs), BoG is introducing hard limits and mandatory loan write-offs. Banks will be required to cap their NPLs at 10% by December 2026 and fully write off unrecoverable loans—excluding those involving related parties.
Additional rules will penalize strategic defaulters, tighten restructuring guidelines, and mandate public disclosure of blacklisted borrowers in financial statements.
“This is about restoring credit discipline,” the Governor said. “No more window-dressing.”
5. Foreign-Owned Banks Told to Respect Local Governance
Perhaps the most pointed directive came against foreign-owned banks that, according to BoG, have increasingly sidelined Ghanaian boards in key decisions.
The central bank will now require prior approval before any major credit or risk decisions are delegated to offshore headquarters.
“Local boards must not serve as rubber stamps for foreign principals,” Dr. Asiama warned, adding that boards that endorse externally imposed decisions without proper local review will be in breach of BoG’s Corporate Governance Directive—and could face sanctions.
The regulator also flagged risks associated with sending sensitive data offshore, saying any such breach of Ghana’s Data Protection Act or Cybersecurity Directive would attract serious consequences.
