BoG tasks commercial banks to upgrade systems, ahead of non-interest banking rollout

By Ebenezer NJOKU

The Bank of Ghana (BoG) has called on commercial banks to urgently upgrade their core banking systems, warning that most existing platforms “may not be compatible” with the technical and governance standards required for non-interest banking as the regulator prepares to introduce a dual-licencing framework for the sector.

Addressing participants at a capacity-building programme on non-interest banking and finance in Accra, Head-Banking Supervision Department Ismail Adam – speaking on behalf of Governor Dr. Johnson P. Asiama – said banks must begin immediate technical assessments rather than wait for the finalisation of regulatory directives.

He noted that conventional banking systems – built to support interest-based lending and deposit structures – are unlikely to adequately handle the asset-backed, risk-sharing and profit-sharing models which underpin non-interest finance.

“Your core banking applications for commercial banking may not be enough or accurate for non-interest banking,” he said.

This initiative marks the first time the central bank is mainstreaming a regulatory framework for non-interest banking since the concept was recognised under the Banks and Specialised Deposit-Taking Institutions Act (Act 930) in 2016.

Under BoG’s proposed regulatory structure, the central bank plans to issue two distinct licences. The first will permit conventional banks to operate non-interest ‘windows’, enabling them to offer non-interest financial products alongside their traditional interest-based business.

The second licence will apply to full-fledged non-interest banks, which will operate entirely within the non-interest framework.

The central bank said the model is designed to foster competition and innovation while preventing market fragmentation by ensuring regulatory consistency across banking, insurance and capital markets. The Securities and Exchange Commission and National Insurance Commission have been working with BoG to harmonise supervisory guidelines ahead of the sector’s rollout.

Calls for capacity building

Mr. Adam noted that successful implementation will depend heavily on the technical and managerial preparedness of banks. He called for significant investments in specialised staff training, recruitment of local and foreign experts and adoption of global best practice in areas such as contract structuring, accounting, auditing and taxation.

He urged banks to strengthen governance and compliance systems, noting that draft guidelines include a two-tier governance structure intended to improve oversight, reduce operational risks and promote transparency across non-interest operations.

Institutions were encouraged to partner with the Chartered Institute of Bankers’ new non-interest banking education programme.

Banks were further advised to conduct “analytical and technology audits” to determine the level of algorithmic and system modification required and develop phased implementation plans, including market analysis, business case development and product rollout sequencing.

Growing demand

Earlier, Prof. John Gatsi – Advisor to the Governor with emphasis on non-interest banking – said global and regional demand for non-interest financial products is rising sharply, with Kenya, Nigeria, Tanzania and Togo already issuing non-interest bonds and deepening market activity.

He noted that 2026 is expected to see “significant levels of introduction and deepening” for non-interest products across Africa, making Ghana’s readiness crucial.

Prof. Gatsi said the central bank’s joint-regulatory engagements are intended to prevent asymmetric supervision and ensure that the emerging industry benefits from a unified approach.

He stressed that without strong domestic capacity, operating non-interest banking will be “extremely difficult”.

“Our objective is to ensure that Ghana’s transition into non-interest banking is grounded in clarity, competence and regulatory coherence. This sector cannot thrive without skilled professionals, sound governance structures and harmonised guidelines across the financial system,” Prof. John Gatsi said.

Capital market implications

Acting Director-General of the Securities and Exchange Commission, Dr. James Klutse Avedzi, said non-interest finance instruments such as sukuk could provide Ghana with new channels to raise capital for infrastructure, including long-delayed highway projects. He said the Commission is preparing guidelines to support issuance and market development once the regulatory framework is completed.

“Non-interest finance presents Ghana with a fresh avenue for mobilising long-term capital, particularly for critical infrastructure,” Dr. Avedzi noted.

“As regulators, we are preparing the framework to ensure that sukuk and related instruments can be issued with integrity, transparency and full market confidence,” he added.

The training programme, attended by regulators, market operators and international facilitators from Kenya and Nigeria, forms part of Ghana’s broader effort to diversify sources of capital, strengthen financial stability and expand investor options.

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