Banking reforms incomplete, state-owned banks under watch - IMF Warns
The International Monetary Fund (IMF) warned on Thursday on PM Express Business Edition that Ghana's banking sector reforms remain incomplete. According to IMF Mission Chief Dr Ruben Atoyan, "Well, absolutely, the reforms need to be completed, that's how we see that." He noted that the banking sector had generally become stronger under the Extended Credit Facility (ECF) arrangement, but warned that unfinished reforms could undermine the gains achieved so far.
Dr. Atoyan cautioned that risks remained, particularly regarding rising non-performing loans (NPLs) in parts of the system, especially among the state-owned banks. He said that the trend in bad loans was a concern that required immediate regulatory attention. He explained that the IMF expects stronger supervisory action from regulators to address these weaknesses and prevent further buildup of risk. He also pointed to vulnerabilities in specialised deposit-taking institutions (SDI).
The IMF is actively working with Ghanaian authorities to strengthen oversight of the financial sector, particularly in areas where risks remain elevated. The IMF maintains that full stability will depend on completing reforms, strengthening supervision and addressing weaknesses in state-linked financial institutions.
Quick Summary
The IMF is concerned about Ghana's banking sector - despite improvements under the economic programme. The Fund suggests unfinished reforms could undermine progress, requiring stronger supervision.
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