The Bank of Ghana plans to strengthen the SDI sector by enhancing governance structures and addressing mission drift. Efforts include engaging strategic investors and collaborating with the Ministry of Finance. A compliance deadline for regulated institutions has been set for July 1, 2025, to adhere to new outsourcing regulations.
The Bank of Ghana (BoG) is poised to strengthen the Specialized Deposit-Taking Institutions (SDI) sector, recognizing their significant role in the financial landscape of Ghana. Mr. Ismail Adam, the Acting Head of Banking Supervision at BoG, emphasized the importance of enhancing the SDI sector’s governance structure to better serve the economy. The objective includes attracting equity from strategic investors to reshape the sector through industry-led consultations on mergers.
Mr. Adam highlighted the necessity to address mission drift among SDIs, where institutions engage in activities outside their original licensing scope. Collaborating with the Ministry of Finance, the BoG has enlisted a consultant to draft recommendations alongside an internal committee to address these challenges. The overarching goal is to revitalize the SDI market to assist individuals previously excluded from accessing financial services, both in terms of credit delivery and deposit mobilization.
In conjunction with these efforts, Dr. Johnson Asiama, the Governor of the Bank of Ghana, confirmed ongoing discussions with the Ministry of Finance to address necessary reforms within the sector. Following a Monetary Policy Committee meeting, he noted the importance of cleaning up the SDI sector to ensure its robustness. Financial institutions have been given until July 1, 2025, to comply with directives regarding governance and operational standards.
Moreover, the BoG has imposed regulations limiting the outsourcing of strategic functions by regulated financial institutions. This move aims to uphold the integrity and independence of decision-making roles essential for maintaining operational integrity. Functions prohibited from outsourcing include senior management roles, credit decision-making, compliance with anti-money laundering processes, and critical internal audit and risk management functions.
The Bank of Ghana is actively working to enhance the governance and operational standards of the Specialized Deposit-Taking Institutions sector, especially focusing on mission drift issues. By fostering strategic investor engagement and collaborating with the Ministry of Finance, the BoG aims to strengthen the sector while ensuring compliance with new regulatory measures. These initiatives signify a commitment to a robust financial sector that aligns with stringent governance standards.
Original Source: 3news.com
