A brewing confrontation is emerging between the Rural Bank CEOs Association and the Bank of Ghana (BoG) over what the CEOs describe as an unfair and unconstitutional clause in the central bank’s Corporate Governance Directive (CGD) for Rural and Community Banks (RCBs).
The Association’s President and CEO of BESSFA Rural Bank, Alhaji Hayatudeen Awudu Ibrahim, accused the BoG of pushing through a policy that threatens the stability and leadership continuity of Ghana’s rural banking industry.
At the heart of the dispute is Paragraph 78 of the Corporate Governance Directive, which came into effect on April 1, 2022. The clause limits CEOs who had already served eight years or more before the implementation date to just one additional four-year term.
Alhaji Ibrahim described the clause as retroactive and unconstitutional, arguing that it violates Article 107(b) of the 1992 Constitution, which prohibits the enactment of laws that adversely affect vested rights.
“This directive is not only retroactive but threatens to erase years of institutional memory and leadership stability within the rural banking sector,” he said. “It will force nearly all experienced CEOs into retirement within months, disrupting ongoing transformation efforts.”
According to the Association, enforcing the directive could trigger mass exits of seasoned CEOs who have been instrumental in strengthening community-based banking.
Alhaji Ibrahim warned that the loss of such expertise could weaken competitiveness, derail digital transformation efforts, and hurt rural financial inclusion.
“The consequences of enforcing this provision far outweigh any perceived benefits. Rural banks operate in fragile local economies, stability and continuity are vital,” he added.
Despite several rounds of engagement spanning more than three years, the Association says the BoG has refused to reconsider the clause. A May 2025 letter from the BoG’s Other Financial Institutions Supervision Department (OFISD) reportedly confirmed that the directive would remain unchanged.
In response, the Rural Bank CEOs Association has hinted at possible legal action to seek a judicial interpretation of the provision.
“If dialogue fails, we are ready to explore all lawful avenues, including the courts,” Alhaji Ibrahim stated. “We must protect the constitutional rights of our members and the integrity of the rural banking system.”
The Association insists that the directive, in its current form, undermines the very principles of good governance it seeks to uphold. Instead of arbitrary tenure limits, Alhaji Ibrahim proposed that performance, ethics, and institutional results should guide leadership tenure in the sector.
Representing the Bank of Ghana at the conference, Mr. Kingston Ocloo of the OFISD avoided confirming whether the regulator would review the provision but assured that the CEOs’ grievances would be relayed to the appropriate authorities for further consideration.
“The Bank of Ghana remains committed to constructive stakeholder engagement,” he said, pledging to communicate any developments in due course.
Chairing the conference, the Paramount Chief of Esikado-Ketan, Nana Kobina Nketsia V, urged rural bank leaders to stand together and defend their collective interests.
“If the rules do not favour the rural banks, they must come together as one body and fight it,” he advised.
While maintaining a firm stance against Paragraph 78, Alhaji Ibrahim reiterated the Association’s commitment to sound corporate governance, innovation, and risk management.
He appealed to the Bank of Ghana to adopt a more inclusive approach that recognizes the realities of rural banking operations and the contributions of long-serving CEOs.
“Our aim is not confrontation but collaboration,” he said. “We support governance reforms, but they must be fair, forward-looking, and in tune with the unique challenges of the rural banking ecosystem.”
As both sides prepare for further engagement and possibly, a courtroom test, Ghana’s rural banking sector faces a defining moment. The outcome could reshape not only leadership tenure but also the governance landscape of community-based financial institutions across the country.
