BoG Sets November 30 Deadline as It Proposes Tough New Requirements for Ghanaian Banks

The Bank of Ghana (BoG) has proposed new liquidity requirements that would compel banks to hold sufficient high-quality liquid assets to cover their projected net cash outflows during 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 indicated that the consultation process is being conducted in accordance with its Procedures for Issuance of Directives, 2020.

Interested parties have until November 30, 2026, to submit their comments on the proposed framework.

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

This means each bank must hold eligible, unencumbered high-quality liquid assets sufficient to cover its projected net cash outflows over the next 30 calendar days under specified stress conditions.

The proposed requirement is intended to strengthen banks’ capacity to withstand sudden funding pressures and meet their financial obligations during periods of market instability or institution-specific difficulties.

It also seeks to improve the banking sector’s resilience to financial and economic shocks while limiting the risk that liquidity problems at individual institutions spread across the wider financial system.

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

To qualify, assets must be readily convertible into cash with little or no loss of value and must not be subject to restrictions that could prevent their use during financial stress.

The draft identifies cash, eligible balances held with the Bank of Ghana and qualifying government securities as potential components of banks’ liquidity buffers.

Other approved securities may also be included, provided they satisfy the prescribed eligibility conditions and are subject to applicable regulatory discounts, commonly known as haircuts.

The framework also proposes limits on the composition of these buffers. Level 2 assets would be restricted to a maximum of 40 per cent of total high-quality liquid assets, while Level 2B assets would be capped at 15 per cent.

In assessing their liquidity needs, banks would be expected to account for potential cash outflows arising from deposit withdrawals, reduced access to wholesale funding, maturing financial obligations and customers drawing on previously approved credit facilities.

The proposed directive would also require banks to conduct internal liquidity stress tests to assess their ability to withstand adverse conditions.

These assessments would include scenarios more severe than the minimum supervisory stress period of 30 days, allowing institutions to identify vulnerabilities that could emerge during prolonged financial difficulties.

The Bank of Ghana has proposed September 1, 2027, as the effective date for the directive, with banks expected to align their internal policies, procedures and systems with the requirements by August 31, 2027.

The draft further provides for a one-year pilot period following publication, during which banks would submit quarterly liquidity reports to the central bank using prescribed templates.

Monthly reporting would be introduced after the pilot period to support more frequent monitoring of institutions’ liquidity positions and compliance with the framework.

As part of the consultation process, the BoG is inviting banks and other interested parties to examine the proposed requirements and submit recommendations before the directive is finalised. Submissions must be sent to bsdletters@bog.gov.gh by November 30, 2026.

The central bank has indicated that it will consider material comments received and provide written explanations of how they were addressed in the final directive, including whether particular recommendations were adopted.

The proposed LCR framework forms part of the Bank of Ghana’s broader efforts to strengthen liquidity risk management across the banking sector.

It is designed to complement the Liquidity Risk Management Directive, 2026, and the Liquidity Monitoring Tools Directive, 2026, by establishing a minimum quantitative standard alongside additional measures for monitoring liquidity risks.

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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