Financial Crime World

Title: Bank of Ghana’s Role in Regulating Ghana’s Banking and Financial Sector

Overview

The Bank of Ghana, Ghana’s central bank and regulatory authority, holds the ultimate responsibility for supervising and regulating all banking and non-banking financial businesses in the country. This article outlines the regulatory framework that Ghanaian financial institutions must operate within and the Bank of Ghana’s functions and responsibilities as a regulator.

Regulatory Framework

Ghanaian financial institutions, including banks, non-bank financial institutions, and foreign exchange bureaus, must operate within the following regulatory framework:

  1. Bank of Ghana Act, 2002 (Act 612)
  2. Bank of Ghana (Amendment) Act, 2016 (Act 918)
  3. Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930)
  4. Non-Bank Financial Institutions Act, 2008 (Act 774)
  5. Companies Act, 2019 (Act 992)
  6. Bank of Ghana Notices, Directives, Circulars, and Regulations

Functions and Responsibilities of Bank of Ghana

The Bank of Ghana’s primary mandate is to create a robust, efficient banking system that protects depositors, benefits customers, and contributes to the economy’s overall growth. The following functions and responsibilities outline the Bank’s role as a regulator:

  • Regulate, supervise, and direct the banking system and credit system for a safe and sound environment
  • Appoint the head of the Banking Supervision Department
  • Propose reforms to related banking legislation

Objectives of Bank of Ghana

To achieve these objectives, the Bank of Ghana:

  • Ensures depositor fund safety
  • Promotes solvency, good quality assets, adequate liquidity, and profitability for banks
  • Enforces adherence to statutory and regulatory requirements
  • Encourages fair competition among banks
  • Manages an efficient payment system

Pre-Independence Era

Post-Independence, the Bank of Ghana began issuing its own currency in the form of Ghanaian pounds, shillings, and pence on 14th July, 1958, marking the formal transition from currency issuance by the West African Currency Board (WACB).

Regulatory Provisions

The regulatory framework for banking in Ghana includes provisions related to:

  • Licensing, de-licensing, monitoring
  • Powers and duties
  • Protection of the supervisor

By focusing on these areas, the Bank of Ghana plays a crucial role in maintaining a stable financial system and promoting wealth creation and economic growth in Ghana.