• The Directives are expected to reduce credit exposures and ensure stability in the banking sector
•The BoG said it may in the future issue additional directives regarding material risk areas
The Bank of Ghana has issued a revised Risk Management Directive for banks and financial institutions operating in the country.
The move according to the central bank forms parts of efforts to reduce credit exposures and ensure stability in the banking sector.
It will further ensure that a regulated financial institution (RFI) has systems in place for identifying, measuring, evaluating, controlling, mitigating and reporting material risks that may affect the ability to meet its obligations to depositors and other stakeholders
A statement issued by the Bank of Ghana explained, “this directive is issued pursuant to Section 92(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and shall apply to Banks, Savings and Loans Companies, Finance House and Financial Holding Companies (FHC) licensed or registered under Act 930.”
Some of the risk management directives contained in a draft document sighted by GhanaWeb include the role of the board, risk management framework, risk management strategy as well as risk culture and organizational accountability for risk.
Meanwhile, the central bank adds it may in the future issue additional directives regarding material risk areas that it considers essential or apt to warrant practical management in such risk areas.
See the full document below:
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