Bank of Ghana Cracks Down on Non-Performing Loans with Sweeping Regulatory Draft

Accra, Ghana – June 2025 | The Bank of Ghana (BoG) is moving to tighten its grip on mounting credit risk in the financial sector with a sweeping proposal aimed at curbing non-performing loans (NPLs) and reinforcing financial stability across regulated institutions.

In a draft regulatory framework released this week, the central bank outlined strict new compliance obligations for banks, specialised deposit-taking institutions (SDIs), and non-bank financial institutions (NBFIs). The proposed rules, which are now open for stakeholder and public input, reflect an increasingly interventionist posture as the BoG seeks to restore asset quality and operational soundness in the face of rising defaults.

“The proposed regulations are expected to enhance asset quality, preserve sector profitability, and safeguard financial system stability,” the BoG stated in the Exposure Draft.

The document was reviewed by Accra Street Journal and points to deep structural reforms, particularly in credit discipline and corporate accountability.

Tougher Risk Controls, Zero Tolerance for Wilful Default

At the core of the proposed measures is a mandate that all Regulated Financial Institutions (RFIs) maintain NPL ratios below 10%. Institutions will be required to write off fully provisioned and unrecoverable loans and restructure accounts for distressed but viable borrowers.

Institutions that fail to comply could face enhanced scrutiny or regulatory sanctions.

In a marked shift toward transparency and deterrence, the central bank will now require all RFIs to:

Submit lists of written-off defaulters to both the BoG’s Financial Stability Department and all credit reference bureaus;

Publicly publish the names of Wilful Defaulters in at least two national newspapers and on their websites;

Disqualify Wilful Defaulters from receiving future credit sector-wide—unless the default was due to verified extenuating circumstances, such as a natural disaster or a medical disability.

Repeat offenders—those listed as Wilful Defaulters more than once—will face industry-wide credit bans lasting a minimum of five years.

Directors to be Held Personally Accountable

The Exposure Draft also introduces direct accountability measures for company directors. Those implicated in fraud, wilful misreporting, or negligence tied to loan defaults may face bans from accessing credit, commensurate with their institutions’ failures.

These provisions are grounded in the Bank’s statutory authority under Act 930 (2016) and Act 774 (2008), which govern banking and non-bank operations, respectively.

The BoG, through this initiative, is signaling a shift away from informal resolution methods and toward systemic enforcement.

Public Comment Invited as BoG Signals Collaborative Governance

The BoG has invited industry players, financial sector associations, and members of the public to submit written feedback on the Exposure Draft.

“This Exposure Draft demonstrates our commitment to collaborative regulatory development and enhanced credit governance,” the Bank said.

Analysts told Accra Street Journal the proposed rules—if enforced—could signal a new era in Ghana’s credit markets, where enforcement and accountability finally match the scale of systemic risk.

Submissions will be reviewed as the central bank finalizes the framework in the coming months.

Last Updated on June 17, 2025 by

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

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