Banks in Ghana are transitioning back to full regulatory compliance following the complete withdrawal of temporary reliefs granted after the Domestic Debt Exchange Programme (DDEP), according to the Ghana Association of Banks (GAB) 2026 Industry Outlook.
The Bank of Ghana (BoG) had introduced regulatory reliefs including reducing the capital conservation buffer from three percent to zero percent and spreading DDEP losses equally over a four year period ending in December 2025. These measures were designed to cushion banks from the significant balance sheet pressures caused by the debt restructuring programme that began in December 2022.
The GAB report states that regulatory reliefs provided temporary breathing space, but their full withdrawal by the end of 2025 signals a return to normal prudential standards. The phasing out of these reliefs, alongside the restoration of stricter capital, provisioning, and International Financial Reporting Standards (IFRS) 9 requirements, marks a critical transition for the banking sector.
The return to full regulatory standards requires banks to meet capital and risk obligations without forbearance, and to restore Capital Adequacy Ratios (CAR) on a fully loaded basis. As of the end of December 2025, twenty one out of the twenty three licensed banks had met the required capital adequacy thresholds, with the remaining two institutions granted until the end of March 2026 to comply.
Banks that remain undercapitalized must implement credible recapitalization plans, with non compliance potentially triggering heightened supervisory measures, including restrictions on dividends, bonuses, and balance sheet expansion. The GAB outlook emphasizes that banks are now required to operate with stronger capital discipline, sharper risk pricing, and renewed focus on asset quality.
The banking sector recorded substantial losses in 2023 due to the DDEP, which restructured approximately one hundred and thirty seven billion cedis of domestic bonds. The overall CAR with regulatory relief improved to fourteen point three percent in October 2024, compared to seven point three percent in the prior year, though approximately twenty two percent of banks remained below the regulatory threshold of thirteen percent without reliefs.
The Bank of Ghana has introduced regulatory measures aimed at reducing non performing loans and has indicated plans to cap the non performing loan ratio at ten percent by December 2026. Lenders exceeding fifteen percent will be barred immediately from paying dividends or bonuses, while those between ten and fifteen percent will face similar restrictions if they remain non compliant for two consecutive years.
The GAB report notes that returning to stricter prudential standards is both necessary and timely, aiming to fortify the banking sector’s resilience, encourage sustainable lending practices, and restore investor confidence. Banks will rebuild capital buffers, refine risk appetites, and maintain operational discipline, a strategy expected to strengthen the sector and boost confidence among depositors, investors, and regulators.
