The Bank of Ghana (BoG) is set to issue a new directive to bolster local decision-making authority and board accountability in foreign-owned banks operating within the country. The move aims to address the growing concern over the outsourcing of major credit and risk decisions to offshore principals, often beyond the scope of Ghanaian regulatory oversight.

Speaking at the Post-MPC Meeting with CEOs of Banks, BoG Governor Dr. Johnson P. Asiama emphasized that Ghana-based boards must not function as mere rubber stamps for decisions already made abroad.

“This undermines the very basis of effective governance and creates unacceptable regulatory blind spots,” Dr. Asiama stated.

Key provisions of the upcoming directive

The forthcoming directive, which aligns with Sections 9 and 13 of the Corporate Governance Directive, will clarify that:

• Local boards and management must retain genuine authority over all material credit decisions and risk actions undertaken in Ghana.
• Any delegation of key decision-making to foreign entities will require prior approval from the BoG.
• Boards that endorse decisions made without proper local deliberation will be in breach of governance regulations and may face regulatory sanctions.
• Core risk and capital planning processes – including ICAAP – must reflect local realities, in accordance with Basel II Pillar 2 expectations.
• Banks found circumventing local governance will be subject to fitness and propriety reviews, especially where directors are deemed to be abdicating fiduciary responsibilities.

Dr. Asiama reiterated that the BoG’s position is not anti-foreign investment but rather pro-accountability.

“We welcome global capital and expertise – but we cannot accept governance frameworks that strip Ghana-based boards of meaningful responsibility,” he asserted.

Outsourcing directive to take effect July 1

This initiative is further reinforced by the BoG’s Outsourcing Directive, which takes effect on July 1, 2025. The central bank has urged all financial institutions to review existing outsourcing arrangements, including those involving data handling, credit assessment, and managerial control.

Institutions must ensure full compliance with:

• The Data Protection Act (Act 843), especially where customer data is transferred offshore without consent.
• The BoG Cybersecurity Directive, which mandates proper handling of digital infrastructure and sensitive information.

Broader implications

Dr. Asiama warned that current trends not only weaken the BoG’s supervisory integrity but also risk undermining institutional capacity by disempowering local professionals and delaying leadership development.

“The integrity of our financial system depends on strong, accountable institutions – and those institutions must be rooted here,” he concluded.

The directive is expected to reshape governance models in foreign-owned banks and affirm the regulator’s push for transparency, accountability, and local empowerment in the Ghanaian banking sector.