Be careful with cross-border lending, foreign currency exposures – BoG to financial institutions
The BoG also urged RFIs not to introduce or implement such products, market entries, or delivery channels unless the required regulatory approvals have been obtained, where applicable.
The Bank of Ghana has issued a directive to Regulated Financial Institutions (RFIs) emphasizing the importance of robust credit risk management practices, especially for those involved in cross-border lending, foreign currency exposures, and other high-risk activities. The directive, known as the Credit Risk Management Directive, requires RFIs to establish stringent policies and procedures for identifying, assessing, and controlling country and transfer risks associated with foreign counterparties.
This includes implementing rigorous due diligence measures, sound credit-granting criteria, and diversified loan portfolios to mitigate potential defaults or credit quality deterioration. The directive will be implemented starting July 1, 2027, aiming to enhance the resilience of RFIs and ensure they adhere to effective credit risk management systems.
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