Wilful loan defaulters to face 5-year ban

Wilful loan defaulters to face 5-year ban – BoG

Persons identified as wilful loan defaulters by regulated financial institutions (RFIs) will be barred from accessing credit for up to five years and reported to the Financial Intelligence Centre, the Bank of Ghana (BoG) has announced.

This forms part of a sweeping set of regulatory measures aimed at reducing the high levels of Non-Performing Loans (NPLs) threatening the solvency and stability of Ghana’s financial sector.

Under the new directive, banks, specialised deposit-taking institutions (SDIs), and non-bank financial institutions (NBFIs) must cut NPL ratios to a maximum of 10% by December 2026. Institutions that fail to comply will face restrictions on dividend payments, loan portfolio growth, and other business activities.

The BoG is also mandating the immediate write-off of fully provisioned bad loans and enforcing stronger credit risk management frameworks, including independent credit reviews, early recovery efforts, and accurate credit data reporting.

Additionally, RFIs must publish the names of wilful defaulters in at least two national newspapers and on their websites. Directors and shareholders linked to non-performing insider loans face disqualification and potential forced divestment.

BoG says these actions align with international best practices and are necessary to protect the financial system and improve credit discipline across the sector.

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