The Bank of Ghana (BoG) has directed banks to strengthen credit risk management, fraud prevention, cybersecurity and liquidity controls as the rapid expansion of private sector lending raises fresh concerns about financial sector vulnerabilities.
The Central Bank warned that the strong rebound in credit demand must be accompanied by stricter lending standards, effective risk management systems and full compliance with regulatory requirements to safeguard the stability of Ghana’s banking industry.
Speaking at a meeting with heads of banks in Accra on Tuesday, the Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, said financial institutions must prioritise prudent lending practices and address weaknesses in their operations to prevent the accumulation of bad loans and other financial risks.
The meeting focused on credit risk management, compliance with non-performing loan (NPL) guidelines and measures to strengthen the resilience of the banking sector.
Dr Asiama disclosed that the average lending rate in the banking industry had declined significantly to 15.9 per cent in August 2026, from 24.2 per cent during the corresponding period in 2025.
He said the reduction in lending rates, coupled with improving credit conditions and renewed demand for loans, had triggered a sharp recovery in private sector credit.
“The decline in lending rates, improved credit conditions and recovery in credit demand contributed to a strong rebound in private sector credit, which grew by 35.5 per cent in August 2026, compared with 13.3 per cent a year earlier,” he stated.
In real terms, private sector credit growth surged to 29 per cent, compared with just 1.7 per cent during the same period last year.
Despite the positive developments, the Governor cautioned that rapid credit expansion without adequate risk controls could expose banks to increased loan defaults and threaten financial sector stability.
He noted that although Ghana’s banking sector remained resilient, supported by strong deposit mobilisation, increased assets and improved capital positions, the level of non-performing loans continued to exceed regulatory thresholds.
Dr Asiama consequently urged banks to strengthen their credit assessment procedures, improve loan monitoring and recovery mechanisms, and ensure strict adherence to existing NPL guidelines.
He announced that the Bank of Ghana would soon introduce a comprehensive Credit Risk Management Directive to reinforce regulatory oversight of lending activities.
The directive, he explained, would establish stronger requirements covering credit origination, administration, monitoring, measurement and recovery.
The Governor stressed that financial institutions must ensure that the growing demand for credit does not compromise the quality of their loan portfolios.
BoG Introduces Tougher Liquidity Requirements
As part of measures to strengthen financial sector resilience, Dr Asiama announced plans to introduce a Liquidity Coverage Ratio Directive requiring banks to maintain adequate high-quality liquid assets.
The proposed directive would ensure that banks could withstand significant liquidity pressures over a 30-day stress period without disrupting their operations.
He explained that effective liquidity management remained critical to protecting depositors, maintaining public confidence and preventing financial instability.
The Governor also urged banks to take the findings of the Central Bank’s macro-prudential stress tests seriously and address weaknesses identified through the assessments.
According to him, banks must adopt proactive measures to strengthen their financial positions rather than wait for vulnerabilities to develop into serious operational challenges.
Banks Told to Strengthen Fraud Prevention Systems
Turning to financial fraud, Dr Asiama called on banks to establish more effective internal controls and fraud risk management systems to prevent, detect and deter fraudulent activities.
He stressed that fraud prevention must be treated as a major corporate governance responsibility, supported by clear institutional policies, qualified personnel and effective oversight.
The Governor said fraud management units should have direct and unrestricted access to Managing Directors and Chief Executive Officers to guarantee their operational independence and effectiveness.
He further emphasised the need for personnel responsible for fraud prevention to possess the necessary technical expertise, professional qualifications and certifications.
His remarks come amid growing reliance on digital banking and financial technology, which has increased the importance of robust security systems across the financial sector.
Central Bank Tightens Cybersecurity and Digital Finance Oversight
Dr Asiama further disclosed that the Bank of Ghana was strengthening its oversight of cybersecurity, financial technology and digital payment services to address emerging risks within the financial system.
He said the Central Bank was also developing regulatory guidance on the responsible use of artificial intelligence and governance arrangements for payment service providers.
The initiative is intended to ensure that financial institutions embrace technological innovation without compromising operational security, consumer protection or regulatory compliance.
On foreign exchange operations, the Governor announced that the BoG was consolidating its existing operational notices and guidelines into a comprehensive regulatory compendium.
He stressed that compliance with foreign exchange regulations remained non-negotiable and urged banks to adhere strictly to the requirements.
BoG Targets Diaspora Remittances for Investment
Meanwhile, Dr Asiama announced that the Bank of Ghana, in collaboration with the Ministry of Finance, had launched the National Remittance and Diaspora Savings Strategy to channel remittance inflows into productive investment opportunities.
He said implementation of the initiative was expected to begin in the first quarter of 2027.
The strategy is intended to create opportunities for diaspora savings and investments, supporting broader national economic development.
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The Governor reaffirmed the Central Bank’s commitment to maintaining a stable, resilient and well-regulated financial system capable of supporting sustainable economic growth.
He urged banking institutions to strengthen internal governance, improve risk management and maintain strict regulatory compliance as credit demand and digital financial services continue to expand.
The planned directives signal tighter regulatory scrutiny of banks as the Bank of Ghana seeks to balance expanding credit access with the need to protect depositors, reduce financial vulnerabilities and preserve confidence in the banking system.
