Bank of Ghana launches council to guide non-interest banking growth
The Bank of Ghana (BoG) has inaugurated the Non-Interest Financial Advisory Council (NIFAC), a new body tasked with supporting the establishment and development of non-interest banking products in Ghana. NIFAC will advise the central bank on the regulation and supervision of non-interest banking institutions, while helping to shape a sound and sustainable non-interest finance ecosystem.
The Bank of Ghana (BoG) has inaugurated the Non-Interest Financial Advisory Council (NIFAC), a new body tasked with supporting the establishment and development of non-interest banking products in Ghana. NIFAC will advise the central bank on the regulation and supervision of non-interest banking institutions, while helping to shape a sound and sustainable non-interest finance ecosystem. The council is chaired by Prof. Bashir Aliyu Umar. Its members are Dr Yussuf Adany Al-Badani, Dr George Baah-Danquah, Adishetu Hamidu Naabo and Samuel Gameli Gadzo. Bank of Ghana Governor Dr Johnson Asiama said the inauguration represented a significant step in strengthening the governance and supervisory arrangements surrounding non-interest banking in the country. He said the council would play a key role in ensuring that products brought to the Ghanaian market are properly structured, transparent and able to meet consumers’ needs. Dr Asiama said the increasing interest in non-interest finance among both financial institutions and the public had made the council necessary. Its creation, he added, would support the orderly development of the sector. Non-interest finance, according to the governor, could also help widen financial inclusion by giving people access to alternative financial products that reflect different needs and values. He stressed that any expansion of the sector would have to take place while maintaining financial stability. However, Dr Asiama warned consumers and institutions against assuming that a product was appropriate simply because it was described as non-interest. “Products should not be accepted merely because they carry a non-interest label. Their structure, their risks, their costs, their obligations, these have to be transparent and capable of being understood by customers,” he said. The council’s responsibilities will extend beyond banking. It will also provide advisory support to the Securities and Exchange Commission (SEC) and the National Insurance Commission (NIC) as Ghana works towards developing a broader non-interest finance ecosystem. Through its advisory role, NIFAC is expected to help provide a stronger framework for oversight across the sector. The Bank of Ghana’s decision to establish the council reflects the need for specialist guidance as financial institutions and members of the public show growing interest in non-interest products. The council will therefore support the central bank’s efforts to ensure that such products are developed in an organised way, with clear structures, understandable obligations and transparent costs and risks. Its work will form part of Ghana’s wider attempt to create a sustainable non-interest finance sector, while ensuring that regulation and supervision keep pace with the development of new products.