BoG targets loan defaulters in new regulatory measures

Commercial banks must now disclose blacklisted willful defaulters in their financial statements. They also need to provide sectoral breakdowns of non-performing loans (NPLs).

This requirement is part of new measures from the Bank of Ghana (BoG). The goal is to enhance transparency and manage credit risks better.

Bank of Ghana Governor, Dr. Johnson Asiama, shared this information during a meeting with bank leaders. This meeting took place at the Bank Square in Accra.

Dr. Asiama emphasized that banks should limit further credit to strategic or willful defaulters. They must also share these individuals' identities with key financial oversight bodies.

The meeting was part of BoG’s follow-up after the Monetary Policy Committee discussions with stakeholders.

To address high NPLs, Dr. Asiama announced that banks must cap NPL ratios at 10 percent by December 2026. He urged banks to tighten restructuring rules and require sustained repayments before reclassification.

He directed banks to improve their reporting on NPLs. Monthly submissions and public transparency are now mandatory.

Dr. Asiama stated that these actions aim to restore asset quality and promote sound lending practices in Ghana's financial system.

In terms of digital lending, Dr. Asiama revealed that BoG is finalizing comprehensive guidelines for this sector. These guidelines will be issued by August 2025.

He expressed concern about online lending platforms trapping Ghanaians in cycles of hidden fees and harassment. As a regulator, he stressed the need for new regulatory measures to protect consumers.

These new rules will focus on licensing, disclosure, data protection, and ethical recovery practices.

Dr. Asiama advised commercial banks involved in digital lending to review their models for compliance with these upcoming regulations.

Additionally, he announced plans for a directive aimed at strengthening governance among foreign-owned banks in Ghana. This measure addresses concerns about outsourcing major credit decisions offshore.

Dr. Asiama noted that such decisions often appear as local governance but are made externally instead. He warned against Ghana-based boards acting merely as rubber stamps for offshore instructions.

This practice undermines effective governance and creates regulatory blind spots, he concluded.