Bright Simons Warns Bank of Ghana’s Non-Interest Banking Rebrand Risks Confusion and Failure
Bright Simons, Vice President of policy think tank IMANI Africa, has raised serious concerns about the Bank of Ghana’s proposed guidelines for “Non-Interest Banking,” cautioning that the move could create legal uncertainty, regulatory risks, and an identity crisis for the sector. In a detailed reaction to the Bank of Ghana’s exposure draft released on December 13, Simons described the rebranding of Islamic Banking as “Non-Interest Banking” as more confusing than constructive.
Simons explained that while the rebrand may aim to avoid religious controversy, it does not accurately reflect the fact that non-interest banking remains fundamentally rooted in Islamic financial principles. He highlighted that, despite the guidelines banning religious symbols and language, banks are still required to adhere to Islamic standards set by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), creating a contradictory regulatory environment.
The policy expert warned that this ambiguity could pose challenges for banks, customers, regulators, and even courts, especially since Ghana lacks dedicated Islamic Banking laws to define how these products should function within the country’s secular legal system. He emphasized that disputes over contracts such as profit-sharing and partnership arrangements, which are grounded in Islamic jurisprudence, may be difficult for Ghanaian courts to resolve under existing laws.
Simons also criticised the “window” model that allows conventional banks to offer non-interest products alongside interest-based services. He cautioned that this approach could be exploited by banks seeking tax or regulatory advantages without fully implementing the risk-sharing principles central to non-interest banking. Additional concerns included unclear provisions on taxation, deposit protection, liquidity management, capital adequacy, and restrictions on late payment penalties, all of which could undermine financial stability and operational viability.
In conclusion, Simons urged the Bank of Ghana to openly introduce Islamic Banking backed by clear legal frameworks addressing taxation, bonds, liquidity support, and dispute resolution. Without these reforms, he warned, Ghana’s non-interest banking sector could remain attractive in theory but fail in practice, leaving banks and customers navigating a system fraught with uncertainty.
source: citi newsroom