BoG orders conversion of Rural Banks into Community Banks by March 31

All existing Rural Banks have been instructed to convert into Community Banks by March 31, 2026, as the Bank of Ghana (BoG) launches a major restructuring of the country’s microfinance sector aimed at boosting financial stability, strengthening governance and expanding financial inclusion.

The directive is contained in the newly issued Guidelines on the Revised Microfinance Sector Framework, developed under the Banks and Specialised Deposit-Taking Institutions Act, 2016 and the Non-Bank Financial Institutions Act, 2008.

Under the new framework, the existing Tier 1–4 classification has been abolished and replaced with four categories: Microfinance Banks, Community Banks, Credit Unions, and Last-Mile Providers. ARB Apex Bank Limited has also been restructured to function as a central services institution for the entire microfinance ecosystem.

New role for Community Banks

Community Banks will operate as licensed deposit-taking institutions with a mandate to serve both rural and urban communities and integrate them more effectively into the national financial system.

After the March 31, 2026 conversion deadline, former Rural Banks must meet revised minimum capital and regulatory standards by December 31, 2026. The minimum capital requirement has been set at GH¢5 million for Community Banks and GH¢10 million for newly established urban Community Banks.

The guidelines also require broader community ownership. At least 30 per cent of shares must be held by identified individuals and groups within a bank’s catchment area. To encourage inclusivity, limits have been placed on shareholding by individuals, related parties, registered groups and corporate entities. Institutions exceeding these thresholds are expected to regularise their ownership structures by the end of 2026.

Capitalisation pathways and enforcement

Community Banks that fall short of the new capital requirement must notify the BoG by June 30, 2026 of their chosen recapitalisation option and submit progress reports by September 30, 2026.

Approved options include standalone capital raising, mergers or acquisitions, and supervised transfers of assets and liabilities to stronger institutions in nearby locations to protect depositors and ensure service continuity. Banks that fail to comply with the timelines risk regulatory sanctions, including operational restrictions.

Introduction of Microfinance Banks

The framework also introduces Microfinance Banks, which will be licensed deposit-taking institutions serving micro, small and medium enterprises, groups and individuals.

Existing savings and loans companies, finance houses, deposit-taking microfinance firms and micro-credit companies may transition into Microfinance Banks, subject to meeting minimum capital thresholds of GH¢50 million for existing institutions and GH¢100 million for new entrants by December 31, 2026. Eligible institutions must communicate their transition choices by June 30, 2026 and provide progress updates by September 30, 2026.

Credit Unions and Last-Mile Providers

Credit Unions with total assets of GH¢60 million or more maintained over a continuous one-year period will come under direct BoG licensing and supervision from the second quarter of 2026. Smaller cooperatives and informal operators—including susu collectors, micro-credit enterprises, rotating savings groups and village savings associations—will be classified as Last-Mile Providers and operate under delegated supervision.

Expanded mandate for ARB Apex Bank

A key element of the reforms is the expanded role of ARB Apex Bank Limited, which will provide shared services to Community Banks, Microfinance Banks and licensed Credit Unions. These services include reserve management, emergency liquidity support, cheque clearing, specie movement, fund management, payment guarantees and shared digital infrastructure such as core banking platforms and ATMs.

ARB Apex Bank will also support inspections, training, policy implementation and temporary interventions for distressed institutions.

Transition timeline

The Bank of Ghana said the overhaul addresses long-standing weaknesses in capitalisation, governance and operational efficiency, while modernising the sector through improved technology, risk management and integration into the national financial system.

All institutions are required to complete their transition to the new framework by December 31, 2026. During the transition period, mergers, acquisitions and asset transfers will require prior regulatory approval, and institutions must notify customers at least 30 days before major changes.

The BoG has also temporarily suspended the licensing of new institutions—except for Community Banks in priority areas—to ensure a smooth implementation of the reforms.

The guidelines take immediate effect, with the central bank reserving the right to amend or supplement the framework to safeguard the stability of Ghana’s financial system.