The Bank of Ghana (BoG) has rolled out a new set of stringent regulatory measures aimed at strengthening the resilience, transparency, and global competitiveness of the country’s banking system.
Governor Dr. Johnson Asiama announced the reforms during a high-level meeting with chief executives of commercial banks, describing them as both “forward-looking” and “immediately corrective” to address current compliance gaps while preparing the sector for future challenges.
A key pillar of the reforms targets credit risk governance in commercial banks. Dr. Asiama emphasised that new credit and risk management guidelines will be aligned with the Basel principles, the globally recognised standards for banking supervision.
“These measures will set minimum standards for underwriting, monitoring, and provisioning,” the Governor said. The new framework aims to curb risky lending practices, ensure proper loan classification, and enhance provisioning for bad debts. By tightening these rules, BoG seeks to protect depositors, minimise systemic risks, and reduce the likelihood of loan defaults undermining the financial sector’s stability.
Liquidity Stress Tests for Banking Resilience
In addition to addressing credit risk, the BoG is introducing robust liquidity and capital resilience requirements. Banks will now be mandated to hold high-quality liquid assets sufficient to cover at least 30 days of potential financial stress.
“This directive ensures that banks can weather unexpected liquidity shocks without compromising customer deposits or destabilising the system,” Dr. Asiama noted. The policy mirrors global best practices, providing a safety net that enables banks to remain operational even during economic turbulence or market instability.
Foreign Exchange Compliance Tightened
A significant portion of the reforms also zeroes in on foreign exchange (FX) operations. According to Dr. Asiama, the BoG is tightening enforcement of the Foreign Exchange Act and the Guidelines for Inward Remittance Services.
The new rules include a ban on FX swaps within remittance operations and prohibit remittance terminations without explicit BoG approval. Furthermore, banks and financial institutions will be barred from applying unprescribed FX rates, ensuring that exchange transactions are transparent, consistent, and fair to customers.
These measures, the Governor stressed, are designed to curb market manipulation, enhance investor confidence, and maintain the integrity of Ghana’s foreign exchange market.
Another bold reform requires banks to conduct a forward-looking assessment of their business models. This review, according to the BoG, must involve full participation from bank boards and senior management to evaluate the long-term sustainability of their strategies.
The move is expected to encourage banks to innovate responsibly, diversify revenue streams, and ensure that growth plans align with both regulatory requirements and market realities. “We want banks to anticipate risks and opportunities, not just react to them,” Dr. Asiama said.
Closing the Compliance Gaps
Dr. Asiama reiterated that the reforms are designed to address immediate weaknesses in compliance while positioning the sector for sustained growth. By insisting on stricter adherence to global banking standards, the BoG aims to eliminate vulnerabilities that could be exploited in times of economic or financial stress.
“No banking system can thrive in the modern economy without transparency, resilience, and a commitment to best practices. These reforms are a decisive step towards ensuring that Ghana’s banks are strong enough to support the country’s economic ambitions.”
Dr. Johnson Asiama
While the banking sector is yet to fully respond to the detailed guidelines, early reactions suggest a mix of cautious optimism and operational concern. Some bank executives acknowledge the long-term benefits of the measures, noting that improved resilience and transparency could attract more foreign investment.
However, others warn that implementing the requirements—particularly the 30-day liquidity coverage—may increase short-term operational costs. Regardless, industry analysts agree that the reforms, if effectively enforced, could significantly reduce systemic risks and boost confidence in Ghana’s banking sector.
The BoG’s sweeping reforms reflect a broader vision of a modern, stable, and competitive financial system capable of supporting Ghana’s economic transformation. By targeting critical areas such as credit risk, liquidity, FX compliance, and strategic planning, the central bank is laying the foundation for a more resilient sector that can withstand both domestic and global shocks.
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