The Governing Council of the Ghana Association of Banks (GAB) held a key meeting with the newly appointed Governor of the Bank of Ghana (BoG) to discuss urgent issues impacting the country’s banking sector.
In a meeting filled with congratulatory remarks and a call for enhanced cooperation, key issues such as Cash Reserve Ratio (CRR) reforms, correspondent banking, fintech regulation, and FX liquidity were discussed.
A major concern was the CRR, which banks believe limits financial intermediation and raises operational costs. The BoG Governor recognized the negative impact and assured that a review was being considered, though any changes would be gradual to maintain economic stability. He also welcomed industry input on managing liquidity risks and noted that the IMF also supported a policy review.
Concerns about Ghana’s credit rating and its impact on correspondent banking were also raised, with banks requesting a revision of Nostro and affiliate exposure limits to facilitate international transactions. The Governor acknowledged these concerns and committed to working on improvements.
As fintechs and Money Transfer Operators (MTOs) continue to grow in the remittance market, banks raised concerns about regulatory gaps that could result in foreign exchange (FX) losses for Ghana. In response, the Governor assured that the Bank of Ghana (BoG) is already reviewing MTO operations and encouraged banks to collaborate in creating a more transparent and stable sector.
Another significant issue discussed was the expiration of the special dispensation on restructured Cocoa Bonds under the Domestic Debt Exchange Programme (DDEP) in April 2025. Banks highlighted the difficulty in selling these bonds due to COCOBOD’s financial situation and market illiquidity. The Governor showed a willingness to extend the dispensation to support the affected banks.
Additionally, GAB members proposed ending the mandatory sale of FX proceeds from mining and oil companies to the BoG. They argued that allowing these funds to flow through the banking system would improve FX price discovery and increase liquidity. The Governor acknowledged the importance of FX market efficiency and expressed openness to further discussions on the issue.
The Governor sought feedback on the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) to improve agricultural financing. Banks supported expanding these initiatives, and the Governor pledged to double agricultural lending and help raise more guarantee funds. He encouraged the Ghana Association of Banks (GAB) to lead efforts in de-risking agricultural value chains.
Banks also expressed concerns about rising Non-Performing Loans (NPLs), stressing the need for fiscal policy changes to lower inflation and interest rates. The Governor agreed that sound policies are crucial and promised to focus on addressing NPL growth.
The possibility of revising Ghana’s banking license system was also discussed, including introducing flexible capital requirements and a tiered banking system. The Governor also noted that integrating Islamic banking into the financial system is being considered as part of broader reforms.
Additionally, the Governor emphasized the need to settle transactions with African trade partners in local currencies instead of relying on the US dollar, which strains the cedi. He encouraged regional banks to support intra-African trade, especially with Nigeria and South Africa.
