Editorial: Central bank expands supervisory focus

The Bank of Ghana has issued new regulations for foreign banks.

These rules require prior approval for any decision-making delegation to foreign entities.

Banks must ensure local discussions before making key decisions.

Failure to comply may lead to sanctions under Ghana’s Corporate Governance Directive.

The measures aim to restore local decision-making in foreign-owned banks.

They address concerns about asset quality and consumer protection in digital finance.

Dr. Asiama emphasized the need for locally accountable financial institutions.

He stated that these institutions should serve the public interest.

The central bank is also tightening oversight of the banking sector.

This includes addressing issues with non-performing loans (NPLs).

A directive will soon be released to tackle high NPL ratios.

The new rules will cap NPLs at 10 percent of gross loans by December 2026.

Additionally, the Bank of Ghana raised concerns about unclear fee structures.

Such fees can erode public trust in banking and payment systems.

Dr. Asiama criticized charging interest on inactive credit accounts.

In some cases, this leads to interest exceeding the original loan amount.

The Bank of Ghana is also expected to release digital lending guidelines soon.

These guidelines aim to curb predatory online lenders exploiting regulatory gaps in digital finance.