Banks to suspend lending to public sector workers under Controller and Accountant General’s payroll
Banks have begun moves to suspend lending to public sector workers under the Controller and Accountant-General’s (CAGD) payroll scheme. This has become necessary due to the growing non-performing loans in the banking industry. The Chief Executive of the Ghana Association of Banks, John Awuah, told Journalists at the Association’s Annual General Meeting that the rising […]
Banks are planning to halt lending to public sector workers who are under the Controller and Accountant-General’s (CAGD) payroll scheme. This decision has been prompted by the increasing number of non-performing loans in the banking sector. John Awuah, the Chief Executive of the Ghana Association of Banks, addressed journalists at the Association’s Annual General Meeting about the issue.
Awuah explained that the growing default on public sector loans has become a significant challenge, leading to this action. He anticipates that this move will affect the lending rate moving forward. Awuah revealed that the decision to suspend lending to public sector workers follows an order from the Bank of Ghana Governor, Dr. Johnson Asiamah, to lower non-performing loans to under 10.0% by the following year.
Awuah emphasized the seriousness of the situation, stating that banks cannot continue to provide loans for salaries being paid but with non-repayments of loans. The Ghana Association of Banks has been advised to collaborate with the Bank of Ghana in creating a framework for the complete implementation of the Lenders and Borrowers Act.
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