The Bank of Ghana is set to strengthen the SDI sector by enhancing governance structures and addressing mission drift issues. Collaborating with the Ministry of Finance, the central bank is focused on ensuring SDIs engage in their designated activities while promoting financial inclusion. Additionally, institutions must comply with new outsourcing regulations by July 2025 to prevent penalties and uphold sector integrity.
The Bank of Ghana (BoG) has announced intentions to strengthen the Specialized Deposit-Taking Institutions (SDI) sector, with a focus on enhancing governance structures. Mr. Ismail Adam, the Acting Head of Banking Supervision, emphasized the vital role SDIs play in Ghana’s financial ecosystem and the need for industry-led consultations to facilitate strategic investor involvement and improve governance practices.
Furthermore, Mr. Adam addressed the issue of ‘mission drift’ among SDIs, noting that these institutions sometimes engage in activities for which they were not initially authorized. The Bank of Ghana is collaborating with the Ministry of Finance to rectify this situation, having engaged a consultant to draft effective strategies alongside their internal committee’s efforts.
The overarching goal is to enhance market functionality by ensuring SDIs engage in their core activities, facilitating financial inclusion for previously underserved populations. Dr. Johnson Asiama, the Governor of the Bank of Ghana, has stated that discussions with the Ministry of Finance are underway to address necessary sector reforms.
Institutions are required to comply with a directive by July 1, 2025, or face penalties. This directive aims to maintain the integrity of the financial sector by regulating the outsourcing of critical functions. Specifically, SDIs are prohibited from outsourcing senior management and strategic oversight functions to safeguard decision-making integrity, particularly regarding credit approvals and compliance with regulatory standards.
In conclusion, the Bank of Ghana is taking significant steps to fortify the SDI sector by improving governance structures and addressing mission drift. Collaborations with the Ministry of Finance aim to ensure that SDIs focus on their designated roles, ultimately promoting financial inclusion. The established compliance frameworks and outsourcing regulations underscore the Bank’s commitment to maintaining a robust financial landscape in Ghana.
Original Source: 3news.com
