The Bank of Ghana (BoG) is poised to implement stringent new regulatory measures, with a particular focus on the forfeiture of significant shareholder holdings, aimed at significantly reducing Non-Performing Loans (NPLs) within the banking industry.

Central to these rigorous new measures is a policy ensuring that significant shareholders will forfeit their holdings to offset debts in cases where their default is directly linked to the Regulated Financial Institution’s (RFI) director or Key Management Personnel (KMP).

This aspect of the regulatory measures was detailed in the “Notice on Regulatory Measures to Reduce Non-Performing Loans (NPLs),” a document from the central bank highlighting the BoG’s unwavering commitment to addressing the increasing risks to the financial system’s profitability, liquidity, and solvency caused by high NPLs.

Under the new regulations, if an RFI’s director, key management personnel, or a significant shareholder has a loan in default for over 180 days, the Bank of Ghana will deem such persons as not “fit and proper.”

The central bank stated that in such instances, the BoG would withdraw approval for these individuals to continue serving as a director or KMP and prohibit them from future service in any financial institution.

The BoG stated that it will mandate a significant shareholder to divest their holdings in all RFIs with the proceeds used to offset the outstanding credit facility.

The BoG also announced that it would mandate the RFI to publish the list of defaulters in at least two national daily newspapers and on its website.