The Bank of Ghana is set to strengthen the Specialized Deposit-Taking Institutions (SDIs) sector, focusing on governance improvements and addressing mission drift. The effort involves consultations for potential mergers and collaboration with the Ministry of Finance. New directives are issued to regulate outsourcing practices within financial institutions, emphasizing the integrity of core functions and strategic decision-making processes.
The Bank of Ghana (BoG) aims to enhance the Specialized Deposit-Taking Institutions (SDI) sector, recognizing its vital role in Ghana’s financial ecosystem. Mr. Ismail Adam, Acting Head of Banking Supervision, emphasized the importance of improving governance structures within these institutions, indicating that the BoG is engaging in industry-led consultations for potential mergers. He noted that bringing in equity from strategic investors is a priority, alongside revamping governance frameworks for better operational management.
Mr. Adam also highlighted concerns over mission drift among SDIs, where institutions engage in activities outside their original licensing scopes. To address this, the BoG works closely with the Ministry of Finance, utilizing insights from both a Ministry-commissioned consultant and an internal committee to align efforts in updating regulatory measures. This collaboration aims to ensure SDIs effectively contribute to broader financial inclusion, enhancing access to credit and deposit services for excluded populations.
Additionally, Dr. Johnson Asiama, the Governor of the Bank of Ghana, reaffirmed the need for a cleanup in the SDI sector during a Monetary Policy Committee press conference. The BoG has mandated regulated financial institutions to comply with new directives by July 1, 2025, or face penalties. These directives outline which functions can be outsourced and emphasize the prohibition of outsourcing critical strategic roles, including decision-making and compliance-related functions to safeguard the integrity of financial operations.
The Bank of Ghana’s initiative to strengthen the SDI sector reflects a commitment to enhancing governance and operational integrity within the financial space. By emphasizing collaboration with the Ministry of Finance and setting compliance timelines, the BoG aims to tackle mission drift and ensure that SDIs serve their intended purposes effectively. This structured approach is crucial for fostering financial inclusion and maintaining robust governance standards in Ghana’s financial landscape.
Original Source: 3news.com
