Bank of Ghana Unveils Sweeping Reforms to Manage Credit Risk, Boost Liquidity, and Strengthen Banking Resilience
The Bank of Ghana (BoG) has announced a comprehensive package of regulatory reforms aimed at strengthening the country’s banking sector. The new framework will address interest rate risk management, credit risk governance, liquidity requirements, and foreign exchange compliance. According to Governor Dr. Johnson Asiama, the measures are designed to enhance transparency, align with global best practices, and ensure the sector’s resilience against future economic shocks.
Speaking at a meeting with heads of commercial banks, Dr. Asiama outlined plans to introduce a framework for managing interest rate risk in the banking book, improve capital planning through the Internal Capital Adequacy Assessment Process, and embed robust stress-testing systems. These changes are expected to detect vulnerabilities early and safeguard banks as credit access expands, following recent policy and lending rate cuts.
On credit risk, the BoG will roll out a new Credit Risk Management Directive aligned with Basel principles, setting minimum standards for loan underwriting, monitoring, and provisioning. Banks will be required to take firm action against deliberate defaulters, diversify loan portfolios, and comply with new directives covering bancassurance governance, large exposure limits, and credit concentration.
To bolster liquidity, the central bank will implement a Liquidity Risk Management Directive mandating that banks hold sufficient High-Quality Liquid Assets to withstand 30-day stress scenarios. This reform also targets loopholes in reserve requirements, addresses misclassification of deposits, and clarifies the treatment of e-money float accounts. Enhanced enforcement of the Foreign Exchange Act will prohibit unapproved remittance channels, FX swaps in remittance operations, and unauthorized FX rate applications, with banks required to submit weekly inward remittance reports.
Dr. Asiama stressed that the reforms form a unified regulatory framework to promote compliance, global competitiveness, and sustainable economic growth. With Ghana’s macroeconomic stability now restored, he urged banks to channel more credit into productive enterprises, support small and medium-sized businesses, invest in infrastructure, and embrace digital innovations to reach underserved markets—while maintaining sound governance and adapting to evolving customer needs and technological shifts.
Source: Citi newsroom