- All banks and financial institutions are required to reduce their non-performing loans to below 10 percent of gross loans by December 2026.
- Institutions that breach this NPL limit must submit a board-approved loan recovery plan within 180 days.
- Banks that fail to comply after the deadline will face penalties, including restrictions on dividends, bonuses, branch expansions, and insider lending.
- Fully provisioned loans deemed unrecoverable must be written off, subject to approval by the Bank of Ghana.
- Individuals classified as wilful defaulters will have their names published in two national newspapers and reported to the Financial Intelligence Centre.
- Wilful defaulters will also be barred from accessing new credit facilities for twice the period of their default.
- Restructured loans will continue to be classified as non-performing until six consecutive repayments are made or, in the case of bullet loans, until 24 months of timely payments are recorded.
- Banks are required to initiate collateral recovery within 30 days of writing off a loan or face regulatory sanctions.
- Institutions with NPL ratios exceeding 5 percent must submit detailed monthly reports to the Bank of Ghana on loan recovery efforts.
- Annual financial reports must disclose sectoral NPL exposures, write-offs, and the identities of wilful defaulters, with exemptions made for defaults caused by genuine hardship.
So What?
The Bank of Ghana’s proposed NPL policy signals a stricter regulatory environment aimed at restoring credit discipline and safeguarding the financial system.
Institutions and borrowers alike must prepare for greater transparency, accountability, and consequences for poor credit practices.
