Non-interest banking products must meet required standards – BoG Governor to NIFAC

BoG Governor Dr Johnson Asiama urged the Non-Interest Financial Advisory Council (NIFAC) to uphold strict standards when reviewing non-interest banking products. During the council's inauguration, he emphasized that products must be transparent, stable, and understandable for consumers. Asiama warned against accepting non-interest products solely based on their label, stressing the need for thorough evaluation of their structure, risks, costs, and obligations.

He clarified that non-interest finance is not "free finance," but operates through mechanisms like trade, leasing, partnerships, and asset-backed transactions. Asiama believes non-interest finance can promote financial inclusion by offering tailored products while maintaining financial stability. The inauguration of NIFAC is part of the Bank of Ghana's efforts to strengthen governance and supervision of the sector.

The council, chaired by Prof. Bashir Aliyu Umar, will advise on regulatory and supervisory matters for non-interest banking institutions in Ghana. Additionally, it will support the Securities and Exchange Commission and the National Insurance Commission as the non-interest finance ecosystem expands. Asiama noted that Ghana already had legal groundwork for non-interest banking under Section 18(1R) of the 2016 Banks and Specialized Deposit-Taking Institutions Act.

However, he stressed that legislation alone does not create a functioning market. The Bank of Ghana established a dedicated team in 2026 to develop the necessary regulatory and supervisory framework, resulting in guidelines for non-interest banking services. These guidelines enable existing financial institutions to offer non-interest services through dedicated windows, while also allowing for the licensing and supervision of fully-fledged non-interest banking institutions.

Asiama called on NIFAC members to carry out their mandate with independence, objectivity, professionalism, and diligence. He stressed that the success of the initiative will be measured by the soundness, usefulness, and public confidence in the products, rather than the number of new offerings.