BoG Issues Strict Guidelines For Financial Institutions

In a recent notification, the Bank of Ghana (BoG) has directed all financial institutions to comply with the Banks and Specialised Deposit-Taking Institutions Act, 2016, and the Fit and Proper Persons Criteria.

These regulations aim to ensure the integrity and stability of the financial sector.

According to the laws outlined by the Bank of Ghana, individuals who were directly involved in the 2017–2019 financial sector clean-up and former directors of failed banks are prohibited from occupying key positions within the financial industry.
This strict measure is intended to prevent any potential risks and safeguard the interests of customers and stakeholders.

The central Bank move emphasizes a commitment to upholding transparency, accountability, and responsible leadership within the financial sector.

According to a notice signed by BoG’s secretary, Sandra Thompson, excessive and imprudent risk-taking led to the collapse of banks and other deposit-taking institutions and so persons who were directly involved in such risky instances should not be allowed to hold any other key positions in banks and other financial institutions

“Poor Corporate Governance contributed significantly to excessive and imprudent risk-taking in the financial sector, which led to the failure of some Regulated Financial Institutions (RFIs) licensed by the Bank of Ghana (BoG), consequently necessitating the 2017-2019 banking sector clean-up.

“In order to sustain the gains made from the clean-up, the BoG issued the Corporate Governance Directive in 2018 as well as the Fit and Proper Persons Directive in 2019 to strengthen and embed sound corporate governance practices in RFIs and to entrench the gatekeeping role of the BoG in the financial sector,” the notice explained.

“For clarity, those under the ban include persons who worked with a financial company “which had its licence revoked, is being or has been wound up by a court of competent jurisdiction or other authority competent to do so within or outside Ghana, or has gone into receivership, insolvency or involuntary liquidation.”

“The BoG reminds the public that persons who have been directly implicated in the 2017-2019 Financial Sector clean-up, and all previous directors of failed banks and SDIs since the enactment of Banks and Specialised Deposit-Taking Institution Act, 2016 (Act 930) do not qualify to hold key positions under the fit and proper persons criteria,” the notice cautioned.

Financial institutions are urged to adhere to these guidelines in order to maintain a sound and trustworthy banking environment in Ghana.