MNN Hub
Dr. Johnson Asiama
The Bank of Ghana has announced a new set of regulatory measures to check high Non-Performing Loans (NPLs) in banks and other financial institutions in the country.
The Central Bank, in a statement, said this action is in response to dealing with increasing risks to the industry’s profitability, liquidity, and solvency, as well as threats to the stability of the financial system.
The Bank of Ghana, in a notice, added that this action is to re-emphasise existing prudential guidance and highlight additional measures in line with international best practices for managing credit risks.
Maintaining a Robust Credit Risk Management Framework
The Bank of Ghana said this measure will ensure that the banks and other financial institutions will maintain credit risk management requirements and demonstrate the robustness to the regulator.
Observing of Prudential limit on Non-Performing Loans
The Central Bank said this measure will ensure that the levels of Non-Performing Loans to gross loan ratio do not exceed 10% or such levels as may be prescribed by the regulator.
It, however, said microfinance Institutions are required to comply with their existing prudential limit on non-performing loans.
Write off all Fully Provisioned Loans and Loans with No Realistic
It said this action will ensure that all the regulated financial institution, with prior written approval from the Bank of Ghana shall immediately write off NPLs in the loss category, as per the BoG prudential loan classification and provisioning norms, as well as those in the substandard and doubtful categories where there is no reasonable expectation of recovering contractual cashflows promptly.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Source: MyJoyOnline | Read Full Story…
GIPHY App Key not set. Please check settings