Dr. Johnson Asiama
The Financial institution of Ghana has introduced a brand new set of regulatory measures to verify excessive Non-Performing Loans (NPLs) in banks and different monetary establishments within the nation.
The Central Financial institution, in a press release, mentioned this motion is in response to coping with growing dangers to the trade’s profitability, liquidity, and solvency, in addition to threats to the steadiness of the monetary system.
The Financial institution of Ghana, in a discover, added that this motion is to re-emphasise present prudential steering and spotlight extra measures in keeping with worldwide greatest practices for managing credit score dangers.
Maintaining a Strong Credit score Danger Administration Framework
The Financial institution of Ghana mentioned this measure will be sure that the banks and different monetary establishments will preserve credit score threat administration necessities and reveal the robustness to the regulator.
Observing of Prudential restrict on Non-Performing Loans
The Central Financial institution mentioned this measure will be sure that the degrees of Non-Performing Loans to gross mortgage ratio don’t exceed 10% or such ranges as could also be prescribed by the regulator.
It, nonetheless, mentioned microfinance Establishments are required to adjust to their present prudential restrict on non-performing loans.
Write off all Totally Provisioned Loans and Loans with No Lifelike
It mentioned this motion will be sure that all of the regulated monetary establishment, with prior written approval from the Financial institution of Ghana shall instantly write off NPLs within the loss class, as per the BoG prudential mortgage classification and provisioning norms, in addition to these within the substandard and uncertain classes the place there isn’t any affordable expectation of recovering contractual cashflows promptly.
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