BoG adopts ‘escalating punitive remedial’ against banks that fail to recapitalise

The Bank of Ghana will impose escalating punitive measures on banks failing to meet minimum recapitalization requirements to prevent negative Capital Adequacy Ratios.

They aim to close one-third of the capital gaps by March 2024 and March 2025. The IMF notes that temporary regulatory forbearance from the Domestic Debt Exchange will end by 2027, with strict enforcement on Non-Performing Loans reporting.

The Ghana Financial Stability Fund (GFSF) is recapitalizing state-owned banks with government bonds, while the World Bank will fund undercapitalized domestic banks, contingent on shareholder capital injections.

The government prioritizes addressing undercapitalization in rural banks and Special Depository Institutions.