Bank of Ghana Directive: Risk Management Frameworks for Regulated Financial Institutions

General Requirements

Regulated Financial Institutions (RFIs) are required to establish and implement a comprehensive Risk Management Framework (RMF). The RMF must include:

• Identification, measurement, evaluation, control, mitigation, and reporting of material risks
• Annual review to ensure the framework remains effective and aligned with the institution’s strategic plan

Risk Management Declaration

Each RFI Board must make an annual declaration on risk management, signed by:

• The Chairperson
• The Chairperson of the Board Risk Committee

The declaration must confirm that the RMF is operating effectively and that material risks are being adequately identified, measured, evaluated, controlled, mitigated, and reported.

Notification Requirements

RFIs must submit:

• A copy of their approved RMF to BoG within 180 days after publication of this directive
• Any changes or revisions to the RMF for approval within 10 business days
• Notification of significant breaches or material deviations from their RMF within 10 business days

Additional Requirements

RFIs conducting business outside Ghana must notify BoG if their right to operate has been affected by local laws. BoG may exempt certain categories of RFIs from specific requirements and issue additional directives on material risk areas as necessary.

Key Takeaways

This directive emphasizes the importance of robust risk management frameworks within financial institutions, requiring regular reviews, declarations, and notifications to ensure compliance with regulatory requirements.