The Bank of Ghana (BoG) says it will scrutinize compensation policies for Chief Executive Officers (CEOs) and key management personnel as well as Board of Directors of universal banks in the country.
Speaking at a press conference in Accra on Monday, Dr Ernest Addison said: “To ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of key management personnel and Boards of Directors separately from total employee compensation.”
Dr Addison added that “To further deepen transparency in the determination of lending rates, banks will be required to develop and publish a clear framework on the risk premium build-up that impacts on an individual borrowers’ credit profiles.”
He said the move is expected to provide borrowers with a more-informed basis for negotiating lending rates with their banks, and enhance transparency in the credit delivery process as well as promote responsible credit behaviour from borrowers.
According to Dr Addison, this is also part of a number of additional policy measures with special emphasis on dealing with the high lending rates in the banking system.
The Central Bank announced the creation of Consolidated Bank Ghana (CBG) to take over some struggling banks in the country in 2018.
These banks which run into liquidity challenges were Sovereign Bank, The Royal Bank, Beige Bank, Construction Bank and Unibank.
The operational licences of Heritage Bank and Premium Bank were also revoked by the Central Bank and their liabilities and selected assets also taken over by the CBG.
The Bank of Ghana also revoked the licences of 386 insolvent microfinance and microcredit companies.
These included 192 microfinance companies which had their licenses revoked.
In a release, the bank said these institutions had engaged in several banking infractions which included breach of section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).