Ghana’s Regulatory Requirements for Banks: Ensuring a Stable Financial System

Introduction

The Bank of Ghana has been entrusted with overarching regulatory authority to oversee all matters related to banking and non-banking financial businesses in the country. The primary objective is to establish a stable, efficient banking system that safeguards depositors’ interests and contributes to overall economic growth.

Framework of Laws

A comprehensive framework of laws governs the operations of banks, non-bank financial institutions, and forex bureaus in Ghana:

• Bank of Ghana Act 2002 (Act 612)
• Bank of Ghana (Amendment) Act, 2016 (Act 918)
• Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930)
• Non-Bank Financial Institutions Act, 2008 (Act 774)
• Companies Act, 2019 (Act 992)
• Bank of Ghana Notices/Directives/Circulars/Regulations

The Central Bank’s Regulatory Functions

The Bank of Ghana is responsible for ensuring the stability of the financial system. This includes facilitating wealth creation, economic growth, and development. According to Act 612 and Act 673, the Central Bank’s regulatory functions include:

1. Regulating, supervising, and directing the banking system and credit system to ensure a safe and sound banking system.
2. Appointing an officer designated as the head of Banking Supervision Department, who shall be appointed by the Board.
3. Considering and proposing reforms of the laws relating to banking business.

Objectives of Regulation

To exercise its mandate effectively, the Central Bank aims to:

• Safeguard depositors’ funds
• Maintain banks’ solvency, good quality assets, adequate liquidity, and profitability
• Enforce adherence to statutory and regulatory requirements
• Promote fair competition among banks
• Ensure an efficient payment system

Consistency with International Standards

The Bank of Ghana’s supervisory functions are designed to be consistent with the Basel Core Principles for Effective Banking Supervision. This framework aims to enhance the legal and regulatory requirements for banks in Ghana, ensuring a stable financial system that supports economic growth and development.

In summary, the laws governing banking operations in Ghana cover licensing, withdrawal of license, arrangement for examining and monitoring banks, powers, and duties, as well as protection of the supervisor. The Bank of Ghana’s regulatory framework is designed to promote a stable and efficient banking system, safeguarding depositors’ interests and contributing to overall economic growth and development.