Following a period of temporary regulatory relief, banks are returning to stricter prudential standards, emphasizing stronger risk controls and capital discipline. The transition is driven by the Bank of Ghana’s gradual withdrawal of regulatory reliefs implemented after the Domestic Debt Exchange Programme (DDEP).
According to the 2026 Industry Outlook by the Ghana Association of Banks, “Regulatory reliefs provided temporary breathing space, but their full withdrawal by the end of 2025 signals a return to normal prudential standards.” These reliefs, which were designed to cushion banks from DDEP-related losses, are now being fully phased out, alongside the restoration of stricter capital, provisioning, and IFRS 9 requirements.
The return to full regulatory standards will require banks to meet capital and risk obligations without forbearance. The report notes that “this signals a return to full prudential supervision, requiring banks to meet capital and risk requirements without regulatory forbearance and to restore Capital Adequacy Ratios on a fully-loaded basis.”
Banks that remain undercapitalized must implement credible recapitalization plans, with non-compliance potentially triggering heightened supervisory measures, including restrictions on dividends, bonuses, and balance-sheet expansion.
The withdrawal of reliefs also calls on banks to strengthen their balance sheets and recalibrate risk management practices. The outlook highlights that “Banks are now required to operate with stronger capital discipline, sharper risk pricing, and renewed focus on asset quality.”
Institutions will need to fully recognize credit and valuation risks, adopt more conservative risk pricing, and ensure robust balance-sheet adjustments as they navigate the new regulatory environment.
“Returning to stricter prudential standards is both necessary and timely. It aims to fortify the banking sector’s resilience, encourage sustainable lending practices, and restore investor confidence. While some banks may face challenges during this adjustment, the transition represents a critical step in safeguarding the sector’s long-term stability,” the report added.
Banks will rebuild capital buffers, refine risk appetites, and maintain operational discipline, a strategy expected to strengthen the sector and boost confidence among depositors, investors, and regulators.
