The Bank of Ghana (BoG) has announced a series of stringent measures to tackle the rising levels of Non-Performing Loans (NPLs), which pose a significant threat to the stability of the country’s financial system.

Under the new regulations, individuals identified as wilful loan defaulters by Regulated Financial Institutions (RFIs) will be barred from accessing credit for up to five years. These individuals will also be reported to the Financial Intelligence Centre.

As part of the directive, banks, specialised deposit-taking institutions (SDIs), and non-bank financial institutions (NBFIs) are required to reduce their NPL ratios to a maximum of 10% by December 2026. Institutions that fail to meet this target will face sanctions, including restrictions on dividend payments, loan portfolio growth, and other business operations.

To strengthen credit discipline and improve asset quality, the BoG is mandating the immediate write-off of fully provisioned bad loans. Additionally, RFIs must implement robust credit risk management frameworks. These include independent credit reviews, early loan recovery efforts, and accurate reporting of credit data.

Another key aspect of the new measures is the public disclosure of wilful defaulters. RFIs are now required to publish the names of such individuals in at least two national newspapers and on their official websites.

Furthermore, directors and shareholders associated with non-performing insider loans will face disqualification and may be required to divest their holdings.

The BoG stated that these actions are in line with international best practices and are essential for strengthening credit discipline and ensuring the long-term resilience of Ghana’s financial sector.