Governor meets CEO’s of universal banks
Universal banks in the country must strengthen their risk management frameworks to reduce the growing credit risk, the Governor of the Bank of Ghana (BoG), Dr Pandit Asiama has said.
He said there was an ongoing deficiencies in credit risk management practices which could negatively impact the banking industry.
Dr Asiama gave the advice in Accra on Wednesday in his maiden meeting with the Chief Executive Officers (CEOs) of the universal banks in the country, and urged the banks to improve their underwriting, early warning systems and provisioning practices.
The Governor said private sector credit was recovering, but credit risk remained elevated as Non-Performing Loans had risen largely due to the growth in legacy exposures.
“The NPL ratio stood at 22.57 per cent at the end-February 2025. Excluding the fully provisioned loss-category loans, the adjusted NPL ratio was 8.93 per cent.” Dr Asiama stated.
He said the BoG stood ready to support the banking industry through policy, dialogue, and collaboration to build a system that truly served the needs of the people and supports long-term growth.
He said many of the fallouts from the banking sector clean up and the domestic debt exchange programme could have been mitigated, had the clean-up been more balanced and consultative, and the DDEP too could perhaps have been avoided entirely with earlier coordination and foresight.
“We cannot change the past, but we can learn from it—and it is my intention to build forward with greater collaboration, trust, and accountability between the central bank and all of you,” Dr Asiama stated.
The Governor said the last few years especially had been challenging and, had tested the resilience of the financial system—from the banking sector clean-up to the DDEP.
“I do recognise that these events have had deep operational, financial, and reputational consequences for banks, and I want to commend you for the strength, professionalism, and commitment with which you have navigated these storms,” he said.
Dr Asiama said the engagement with the CEOs were central to ensuring a mutual understanding of the policy direction and alignment in the collective efforts to foster macroeconomic stability and recovery.
The Governor stated that lessons from past bank resolutions continue to shape our crisis preparedness.
“We are refining our supervisory and resolution tools—including work to strengthen recovery planning and introduce a resolvability assessment framework—to ensure banks are both well-capitalized and resolvable in distress, especially in an increasingly interconnected system,” Dr Asiama stated.
On the recent policy stance by the Monetary Policy Committee, the Governor said committee by a majority decision, raised the policy rate (the rate at which the central bank lends to commercial banks) by 100 basis points to 28.0 percent from 27 per cent.
“This decision is aimed at reinforcing the disinflation process, which, while underway, remains too gradual to secure lasting stability,” Dr Asiama stated.
He said with private sector credit and broad money supply expanding, demand-side pressures could re-emerge without continued vigilance.
“The committee therefore adopted a proactive stance—guided by recent experience that delayed tightening can result in more persistent inflation and costlier adjustments,” the Governor stated,
Dr Asiama averred that the policy rate hike would affect borrowing costs for businesses and households, and urged banks to exercise prudence in adjusting rates, adding that viable businesses should continue to receive support.
BY KINGSLEY ASARE
