BoG to Enforce Local Accountability and Strengthen Board Independence in Foreign-Owned Banks

Accra, June 3 – The Bank of Ghana (BoG) is set to introduce a new directive aimed at reinforcing local accountability and ensuring true board independence in foreign-owned banks operating within the country. This was announced by the Governor of the BoG, Dr. Johnson Asiama, during the 124th Monetary Policy Committee (MPC) meeting with bank CEOs in Accra.

The move comes in response to growing concerns that critical credit and risk management decisions are increasingly being made by foreign parent entities outside Ghana’s regulatory reach. Dr. Asiama emphasized that such practices erode the foundations of good governance and compromise regulatory oversight.

“Let me be clear,” he stated. “Boards based in Ghana must not merely rubber-stamp decisions already taken offshore. This undermines local authority and creates significant regulatory blind spots.”

According to the Governor, the upcoming directive will set clear expectations for foreign-owned banks, including the following key provisions:

• Local boards and executive teams must retain full decision-making authority over material credit approvals and risk management strategies implemented in Ghana.

• Prior approval from the BoG will be mandatory before delegating any core functions to offshore entities.

• Boards that approve externally-made decisions without adequate local review will be in breach of the BoG’s Corporate Governance Directive (Sections 9 & 13), and may face sanctions.

• Risk management frameworks, ICAAPs, and capital planning processes must be grounded in the Ghanaian context, in alignment with Basel II Pillar 2 requirements.

Dr. Asiama warned that banks found circumventing local governance will also be subject to fitness and propriety assessments. Directors who fail to fulfill their fiduciary obligations could be held personally accountable.

The Governor also highlighted the relevance of the BoG’s Outsourcing Directive, which takes effect on July 1, 2025. Banks have been instructed to audit all outsourcing arrangements, particularly those related to credit assessments, data handling, and operational control, to ensure compliance with BoG expectations for local accountability and operational resilience.

Dr. Asiama also raised alarm over potential legal and ethical breaches resulting from offshore data transfers. He cited violations of Ghana’s Data Protection Act (Act 843) and the BoG Cybersecurity Directive, warning that sending sensitive customer information abroad without proper consent jeopardizes both customer trust and regulatory compliance.

Additionally, he pointed to the long-term harm caused by such practices, stating that they stifle the development of local talent and diminish institutional capacity. “When key decisions are exported abroad, Ghanaian professionals are denied the opportunity to build leadership and technical skills,” he said.

In closing, Dr. Asiama underscored that the directive is not an attack on foreign investment but a necessary step to protect Ghana’s financial ecosystem.

“This is not about being anti-foreign—it is about being pro-governance and pro-accountability. We welcome international expertise and capital, but not at the cost of stripping our institutions of their authority,” he asserted. “Our financial system must be rooted in strong, accountable governance, and that governance must reside here, in Ghana.”