Stronger governance is non-negotiable for banks – Asiama to banking industry

Bank of Ghana Governor Dr. Johnson Pandit Asiama says strong governance is a condition for competitiveness, warning banks that symbolic oversight will no longer be tolerated.

Addressing industry players during the 2025 Governor’s Day and Annual Bankers’ Dinner in Accra, Dr. Asiama stressed that effective oversight by boards and senior management is central to rebuilding confidence in Ghana’s financial system.

“Strong governance is not a constraint on competitiveness; it is a prerequisite for it,” he said, noting that boards must go beyond formality and take full responsibility for risk oversight and accountability.

He explained that the Bank of Ghana deliberately tightened governance expectations across the sector in 2025, particularly in foreign-owned institutions, to ensure local boards exercise real authority rather than symbolic control.

“Oversight cannot be symbolic,” Dr. Asiama stated. “Boards must be accountable for outcomes, not just processes.”

The Governor said weaknesses exposed by the Domestic Debt Exchange Programme highlighted the dangers of poor governance, with capital adequacy pressures emerging across the sector. He revealed that while 11 banks fell below prudential capital thresholds at the end of 2024, that number dropped to five by November 2025 following recapitalisation efforts and closer supervision.

“Remaining capital gaps must be closed and buffers rebuilt,” he warned, adding that supervisory tolerance for repeated weaknesses will be significantly lower going forward.

Dr. Asiama also linked governance to asset quality challenges, pointing out that high non-performing loans were treated as a systemic risk rather than a routine statistic.

“Elevated NPLs weaken confidence and constrain credit,” he said. “Banks have been given clear timelines to bring NPL ratios down to the 10 percent benchmark by end-2026.”

He noted that as interest rates ease, institutions have an opportunity to restructure viable loans responsibly, but insisted that risk must be confronted directly.

Beyond banking, the Governor said governance reforms are being extended to microfinance institutions and specialised deposit-taking institutions to protect depositors and restore trust, especially among vulnerable customers.

“Supervision is exercised firmly, but with purpose,” Dr. Asiama explained. “The objective is protection of depositors, institutions, and the credibility of the system.”

Looking ahead to 2026, he said governance will remain a core pillar of financial stability, with deeper regulatory engagement around risk appetite, internal controls, and board accountability, as the sector transitions from recovery to sustainable growth.