The Bank of Ghana is facing mounting pressure from civil society following strong objections to its proposed framework for the regulation and supervision of non-interest banking.
A leading public-interest advocacy organisation, Advocates for Christ Ghana, Economy, Finance and Business Sustainability Gate, has called on the central bank to suspend its planned normalisation of non-interest banking, warning that the current framework poses serious risks to financial stability, regulatory coherence, and constitutional order.
In a detailed memorandum, the organisation responded to the Bank of Ghana’s exposure draft guideline, arguing that the proposal is fundamentally flawed and unsuitable for implementation in its present form.
According to the group, the draft guideline suffers from material internal contradictions, technical gaps, and unresolved prudential risks.
The memorandum argues that the central bank has not developed a tested and context-specific non-interest banking model that fits Ghana’s legal, regulatory, and institutional environment.
Instead, the advocacy group contends that the draft attempts to import external jurisprudential and operational standards into Ghana’s financial system without adequate adaptation. This approach, it warns, creates inconsistencies that could weaken regulatory certainty and undermine the stability of the broader financial sector.
The organisation stresses that major structural changes to the banking system must be anchored in clear regulatory logic and robust technical justification, conditions it says are absent in the current proposal.
Constitutional and Legal Concerns Take Centre Stage
Beyond technical considerations, the memorandum raises significant constitutional concerns. Advocates for Christ Ghana argues that the proposed framework lacks sufficient constitutional grounding and risks violating the principles of neutrality and equal treatment before the law.
The group warns that the normalisation of non-interest banking, as currently designed, could result in the creation of a parallel financial system operating alongside the conventional banking framework. Such an outcome, it notes, could undermine constitutional safeguards by introducing differentiated regulatory and adjudicatory standards that are not uniformly applied across the financial sector.
According to the submission, these shortcomings expose the Bank of Ghana to potential legal challenges and could erode public confidence in financial regulation.
A major point of contention is the proposed establishment of the Non-Interest Banking Advisory Committee and the Non-Interest Finance Advisory Committee. While the draft guideline presents these bodies as advisory, the advocacy group argues that their functions exhibit adjudicatory characteristics.
The memorandum cautions that these structures could undermine the supervisory primacy of the Bank of Ghana and blur the lines of regulatory authority. It further warns that consumers of non-interest banking institutions may end up with weaker protections compared to customers of conventional banks, particularly in dispute resolution and enforcement matters.
Risks Linked to the Window Banking Model
The organisation also expressed deep concern over the proposed window system, which would allow conventional banks to operate non-interest banking windows alongside traditional services. According to the group, this model is operationally fragile and prone to governance challenges.
It warns that, without detailed accounting, auditing, and disclosure rules, the window system could facilitate opaque cost allocations and regulatory arbitrage. Such weaknesses, the memorandum argues, could distort competition within the banking sector and complicate effective supervision by the central bank.
Further criticism is directed at the treatment of accounting standards, capital adequacy, staff training, consumer education, and disclosure requirements in the draft guideline.
The group notes that the inconsistent elevation of international standards such as those issued by AAOIFI and IFSB could conflict with the authority of the Institute of Chartered Accountants, Ghana, creating uncertainty for regulated institutions.
The memorandum also questions the technical soundness of applying conventional capital adequacy rules to non-interest banking institutions without dedicated prudential guidance tailored to their unique risk profiles. According to the group, this gap exposes both institutions and consumers to avoidable risks.
Questioning the Economic Rationale
Advocates for Christ Ghana also challenges the economic justification for establishing a specialised non-interest banking regime at this time. It argues that the draft guideline fails to demonstrate sufficient market demand or adequately assess the systemic and consumer cost implications of such a framework.
The organisation Insists that regulatory innovation must be supported by clear evidence of economic necessity and public benefit, rather than assumptions or external precedents.
In light of these concerns, the group is calling on the Bank of Ghana to withdraw the draft guideline and undertake a comprehensive review. It insists that any future framework must ensure constitutional neutrality, equal consumer protection, supervisory clarity, and the avoidance of parallel adjudicatory systems.
The memorandum concluded by emphasising that its position is grounded in regulatory integrity, constitutional order, and public-interest considerations, not ideological opposition to non-interest banking. As debate intensifies, the Bank of Ghana is expected to face increasing scrutiny over how it balances financial innovation with legal certainty and systemic stability.
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