BoG moves to reinforce local governance in foreign-owned banks

The Bank of Ghana (BoG) plans to issue a new directive. This will strengthen local decision-making and board accountability in foreign-owned banks. The goal is to address concerns about outsourcing major credit and risk decisions abroad. These decisions often escape Ghanaian regulatory oversight.

At the Post-MPC Meeting with bank CEOs, BoG Governor Dr. Johnson P. Asiama spoke on this issue. He stressed that boards based in Ghana should not just approve decisions made overseas.

“This undermines effective governance and creates regulatory blind spots,” Dr. Asiama said.

Key provisions of the upcoming directive include:

Local boards must have real authority over all significant credit decisions in Ghana.

Any delegation of key decisions to foreign entities needs prior approval from the BoG.

Boards that support decisions made without local discussion will breach governance regulations.

Core risk and capital planning processes must reflect local realities, as per Basel II Pillar 2 expectations.

Banks bypassing local governance will face fitness and propriety reviews for directors neglecting their responsibilities.

Dr. Asiama emphasized that the BoG is not against foreign investment but supports accountability.

“We welcome global capital and expertise, but we need responsible governance,” he asserted.

Outsourcing directive to take effect July 1

This initiative aligns with the BoG’s Outsourcing Directive, effective July 1, 2025. The central bank urges financial institutions to review existing outsourcing arrangements. This includes data handling, credit assessment, and managerial control.

Institutions must comply with:

The Data Protection Act (Act 843), especially regarding customer data transferred offshore without consent.

The BoG Cybersecurity Directive for proper handling of digital infrastructure and sensitive information.

Broader implications

Dr. Asiama warned that current trends weaken the BoG’s supervisory integrity. They also risk undermining institutional capacity by disempowering local professionals and delaying leadership development.

“The integrity of our financial system relies on strong institutions rooted here,” he concluded.

This directive aims to reshape governance models in foreign-owned banks. It reaffirms the regulator’s commitment to transparency, accountability, and local empowerment in Ghana's banking sector.