Banks have begun moves to suspend lending to public sector workers under the Controller and Accountant-General’s (CAGD) payroll scheme.

This has become necessary due to the growing non-performing loans in the banking industry.

The Chief Executive of the Ghana Association of Banks, John Awuah, told Journalists at the Association's Annual General Meeting that the rising default of public sector loans has become a challenge, hence the action.

He, therefore, believes that this will impact on the lending rate going forward.

According to him, the action follows a marching order to the banks from the Bank of Ghana Governor, Dr. Johnson Asiamah, to reduce non-performing loans to less than 10.0% by next year.

"We have begun discussions and in the coming weeks and days we are going to take an action to suspend total lending to public sector workers under the Controller and Accountant Generals payroll. This is serious because we cannot continue to do this to the industry [banking] where salaries are being paid but our loan repayments are not remitted”.

“We shall be forced to do this to save the industry and I can assure you that this time, we shall go ahead”, he added.

Furthermore, Mr. Awuah said “we have had all the discussions and whatever we need to say has been said but still we don't get the results. This action was supposed to happen three months ago but few people from higher offices intervene and we had to pause. This time in the next few days or weeks, you're going to hear from us", he pointed out.

The Association has also been charged to partner the Bank of Ghana in developing a framework for the full implementation of the Lenders and Borrowers Act.