BoG Announces Major New Rule for All Banks in Ghana; Here Is What Could Change in 2027

The Bank of Ghana (BoG) has proposed new liquidity requirements that would compel commercial banks to hold sufficient high-quality liquid assets to cover their projected net cash outflows over a 30-day period of financial stress.

The proposal is outlined in the Liquidity Coverage Ratio (LCR) Directive, 2026, an exposure draft published by the central bank on October 9, 2026, for consultation with banks, industry stakeholders and the general public.

In a notice published on its website, the BoG said the consultation process was being conducted in line with its Procedures for Issuance of Directives, 2020.

Interested parties have until November 30, 2026, to submit their comments and recommendations.

Under the proposed directive, banks would be required to maintain a Liquidity Coverage Ratio of at least 100 per cent.

This would mean that their eligible, unencumbered high-quality liquid assets must be sufficient to cover projected net cash outflows over the following 30 calendar days under specified stress scenarios.

The measure is intended to strengthen banks’ ability to withstand sudden funding shortages and meet their financial obligations during periods of market instability or institution-specific financial pressure.

According to the draft framework, the proposed requirement would enhance the banking sector’s resilience to economic and financial shocks while limiting the possibility of liquidity difficulties at individual institutions spreading across the wider financial system.

The Liquidity Coverage Ratio would be calculated by dividing a bank’s stock of eligible high-quality liquid assets by its projected net cash outflows over a 30-day period.

To qualify, the assets must be readily convertible into cash with minimal or no loss of value during periods of financial stress.

They must also be free from restrictions that could prevent banks from accessing or using them when needed.

The proposed directive identifies cash, eligible balances held with the Bank of Ghana and qualifying government securities as assets that could form part of the liquidity buffer.

Other securities may also qualify, subject to the conditions and valuation discounts established under the framework.

The draft places limits on the proportion of different asset categories that banks can include in their liquidity reserves.

Level 2 assets would be capped at 40 per cent of the total high-quality liquid asset buffer, while Level 2B assets would be restricted to a maximum of 15 per cent.

Banks would also be expected to account for potential cash outflows resulting from deposit withdrawals, reduced access to wholesale funding, maturing financial obligations and customers drawing on previously approved credit facilities.

In addition to meeting the minimum regulatory requirement, banks would be required to conduct internal liquidity stress tests.

These assessments would include scenarios that are more severe and extend beyond the prescribed 30-day supervisory period.

The Bank of Ghana has proposed September 1, 2027, as the effective date for the directive. Banks would be expected to bring their internal policies, operational processes and systems into compliance by August 31, 2027.

The draft also outlines a one-year pilot phase following publication, during which banks would submit quarterly reports to the central bank using designated templates. Monthly reporting would become mandatory after the pilot period.

These reporting arrangements are intended to help the regulator monitor banks’ liquidity positions and assess their compliance with the proposed requirements.

The central bank is inviting banks and other interested parties to review the exposure draft and provide feedback before the directive is finalised.

Stakeholders are required to submit their comments by email to bsdletters@bog.gov.gh on or before November 30, 2026.

The BoG has indicated that it will consider substantive feedback received during the consultation and provide written explanations outlining how the comments were addressed in the final directive, including whether specific recommendations were adopted.

The consultation gives financial institutions and other stakeholders an opportunity to identify potential challenges and propose adjustments before the new requirements take effect.

The proposed Liquidity Coverage Ratio requirement forms part of the Bank of Ghana’s wider efforts to strengthen liquidity risk management and improve the stability of the banking sector.

According to the exposure draft, the directive is intended to complement the Liquidity Risk Management Directive, 2026, and the Liquidity Monitoring Tools Directive, 2026.

Together, the frameworks would establish quantitative liquidity standards and additional mechanisms for monitoring banks’ exposure to funding risks.

If adopted, the proposed rules could require banks to review their treasury operations, asset allocation strategies, liquidity forecasting systems and regulatory reporting procedures to ensure compliance.

Source: https://www.adomonline.com/bog-proposes-new-rules-to-ensure-banks-can-always-pay-customers-when-they-need-their-money/

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