BoG Tightens Disclosure Rules on NPLs, Mandates Monthly Reporting for RFIs With NPLs Above 7%
The Bank of Ghana (BoG) has introduced new regulatory measures aimed at reducing non-performing loans (NPLs) in the banking and financial services sector, requiring regulated financial institutions (RFIs) with NPL ratios above 7 percent to submit monthly reports to the Central Bank.
According to the regulator, RFIs must make detailed disclosures in their Annual Reports, including:
NPL amounts disaggregated by sector in line with BoG’s prescribed classification;
details of cumulative and current year’s loan write-offs;
breaches or non-compliance with the Central Bank’s NPL directives;
non-performing related party exposures, with borrower names, outstanding amounts and classification status; and
loans of wilful and non-wilful defaulters that have been written off, as well as amounts recovered.
The directive forms part of the BoG’s broader strategy to strengthen credit risk management frameworks across the sector, reduce systemic vulnerabilities, and ensure improved disclosure for investors, regulators and the public.
Meanwhile, the Central Bank has directed banks, specialised deposit-taking institutions (SDIs) and non-bank financial institutions (NBFIs) to write off all fully provisioned loans and those with no realistic prospects of recovery, as part of efforts to reduce non-performing loans (NPLs) in the financial sector.
According to the Central Bank, regulated financial institutions (RFIs) with prior written approval from the BoG are required to immediately write off loans classified under the “loss” category, in line with prudential loan classification and provisioning norms.
The directive also applies to loans in the “substandard” and “doubtful” categories where there is no reasonable expectation of recovering contractual cashflows in a timely manner.
