The Worldwide Financial Fund (IMF) has warned that specialised depository establishments (SDIs) may develop into a supply of recent vulnerabilities in Ghana’s monetary system if regulatory and supervisory gaps should not urgently addressed.
IMF Mission Chief Dr Reuben Atoyan mentioned on Thursday’s PM Specific Enterprise Version that though Ghana’s banking sector has improved considerably underneath the Prolonged Credit score Facility programme, key dangers stay unaddressed.
“Make no mistake, the reforms have to be accomplished. That is our view,” he mentioned.
The feedback come as Ghana continues banking sector reforms initiated after the monetary cleaning train, with a concentrate on strengthening capital buffers, bettering supervision and decreasing publicity to dangerous loans, notably in state-owned monetary establishments.
He mentioned the general energy of the banking sector had improved “considerably” in the course of the IMF-backed program, however unfinished reforms continued to place the system in danger.
“General, the energy of the banking sector has improved considerably in the course of the ECF settlement,” he mentioned.
Nonetheless, Dr Atoyan cautioned that non-performing loans stay a significant concern, particularly in state-owned banks.
“We see a danger that non-performing loans stay fairly excessive, notably in state-owned banks, and this must be addressed going ahead,” he mentioned.
He careworn that the rising non-performing mortgage ratio requires stronger supervisory measures from regulators to forestall additional stress on the monetary system.
“We wish to deal with this with stronger supervisory measures,” he mentioned.
Whereas he acknowledged that some mortgage defaults have been regular within the banking system, he mentioned the upward pattern in non-performing mortgage ratios was inflicting concern.
“It isn’t an issue if some loans default, however when you see the ratio going up, meaning the non-performing mortgage ratio goes up,” he mentioned.
Dr. Atoyan additionally pointed to broader structural dangers inside components of the monetary sector, notably SDI, which he mentioned required pressing motion.
“One other sector that must be addressed going ahead is Specialised Depository Establishments (SDI), and this can be a sector that might want to deal with the challenges of the long run,” he warned.
He added that the IMF is working intently with the Ghanaian authorities to strengthen its oversight and be sure that remaining vulnerabilities within the monetary system are addressed.
