The Bank of Ghana is set to strengthen the SDI sector by enhancing governance structures and promoting industry-led mergers. The focus will include attracting strategic investors and addressing mission drift among SDIs. Compliance with new directives is mandated by July 2025, enforcing governance standards amid increased outsourcing in the financial sector.
The Bank of Ghana (BoG) is poised to reinforce its specialized deposit-taking institutions (SDI) sector. Mr. Ismail Adam, the Acting Head of Banking Supervision, emphasized the crucial role of SDIs in Ghana’s financial ecosystem. The focus will be on enhancing governance structures and fostering industry-led consultations to facilitate strategic mergers within the sector.
Mr. Adam conveyed that the BoG aims to attract equity from strategic investors and revamp the governance framework of SDIs to optimize their operations. He addressed the issue of mission drift, where SDIs engage in activities outside their licensing agreement, affirming the BoG’s commitment to aligning SDI activities with their intended purposes.
In collaboration with the Ministry of Finance, the Bank of Ghana is synthesizing findings from an external consultant’s input with insights from an internal committee. This consolidation aims to revitalize the SDI market, enabling broader access to financial services for individuals previously excluded from the financial sector.
Before Mr. Adam’s press engagement, Dr. Johnson Asiama, the Governor of the BoG, affirmed ongoing discussions with the Ministry of Finance to undertake a thorough cleansing of the sector. During a Monetary Policy Committee meeting, he confirmed the necessity for regulatory improvements within the SDI sector.
Regulated financial institutions are required to comply with new directives by July 1, 2025, or risk administrative penalties amounting to GH₵12,000. The BoG’s initiative underscores its dedication to maintaining a robust financial sector while enforcing stringent governance standards amidst a trend of outsourcing by banks and SDIs.
The guidelines specify that financial institutions may outsource certain functions upon approval, while strategic functions related to core governance and decision-making remain non-eligible for outsourcing to safeguard the integrity of these vital roles.
In conclusion, the Bank of Ghana is taking significant steps to enhance the specialized deposit-taking institutions sector through improved governance and strategic investor engagement. The emphasis on aligning SDI activities with their original missions aims to promote inclusivity within the financial system. Furthermore, stringent regulations seek to uphold the integrity of financial institutions amidst the growing trend of outsourcing, demonstrating the BoG’s commitment to a resilient financial landscape in Ghana.
Original Source: 3news.com
