The Bank of Ghana (BoG), as part of an effort to roll out full operationalization of Non-Interest Banking and Finance (NIBF) in the country, is developing new liquidity management tools tailored to non-interest banking institutions, to ensure their excess funds can be managed effectively.
Liquidity management is a key requirement in monetary policy management, but policy instruments like repos, open-market operations, and reserve requirements of banks are structured based on conventional interest bearing activities, that do not attract non-interest banks.
According to the central bank, liquidity management for non-interest institutions will be guided by asset-backed structures and risk-sharing models rather than conventional interest-based instruments, but will still meet the same prudential benchmarks. However, it explains that, if no non-interest liquidity management tools are available, non-interest banks may invest excess liquidity in conventional ones but will not take interest.
“Short term and long term Sukuks are liquidity management tools, and the (Central) Bank is working together with the Securities and Exchange Commission to develop their guidance in parallel to create liquidity tools attractive to non- interest banks” the BoG noted in a frequently asked questions note published on its website.
“Further, we have learnt of liquidity management tools deployed by other central banks,(for non-interest banking) which we shall add to the portfolio of liquidity management instruments.”
Meanwhile, the central bank outlined some new liquidity management tools it will be implementing, such as:
A safe custody account which will allow participants to deposit excess funds in their possession for a period of 3 or 7 days; A non-interest note which shall entitle the participating institutions to subsequently obtain interest-free loans up to the amount they initially deposited with the central bank; Non-interest backed securities The bank may invest in non-interest financial certificates issued by multilateral financial institutions normally in the form of Sukuk structured on different products; and Lenders of last resort instruments for example, intraday facilities are being considered.
The BoG is working with the Securities and Exchange Commission to develop guidance on Sukuk, creating attractive liquidity tools for non-interest banks. Transparency and consumer protection are integral to the non-interest banking guidelines, with clear disclosures and independent reporting.
These developments aim to promote financial inclusion, broaden economic opportunities, and provide consumers with more choices while ensuring fairness and non-discrimination in the financial system.
Consequently, the Bank of Ghana organised a capacity-building program last week, for stakeholders, including banks, insurers, and capital market players.
The training covered key areas of NIBF such as; Sukuk structuring, non-interest product development, licensing procedures, and governance models.
This move is aimed at promoting financial inclusion, broadening economic opportunities, and offering consumers more choices while ensuring fairness and non-discrimination in the financial system.
“It is significant to develop capacities for the emerging new model products of financing and banking in Ghana”, Ismail Adam, Head of Banking Supervision at Bank of Ghana said, while addressing the participants on behalf of the Governor.
“Since 2016, when NIBF were made permissible in Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), this is the first time we have invested as Bank of Ghana in regulatory effort toward this novelty.
“The Bank of Ghana has reached this important point because of the inclusive engagement process with both Christians and Muslims agreed on this novel concept”, Mr Adam noted.
Professor John Gatsi, Advisor to the Governor on Non Interest Banking and Finance at the Bank of Ghana (BoG), in his opening remarks noted that, the Chartered Institute of Bankers (CIB) Ghana has begun rolling out certificate courses for banking professionals in capacity building preparation to await implementation of the NIBF.
Key highlights of the NIBF framework:
The framework represents an effort to deepen financial inclusion and create space for alternative forms of finance that align with Ghana’s secular and regulatory principles while expanding access to ethical banking services.
The draft non-interest banking guideline is currently undergoing internal validation at BoG and will soon be presented to the Governor for review and approval, with publication expected by year end.
Operational standards
The guideline will define licensing requirements, governance structures, operational standards, and product approval processes.
Each institution will have its own internal governance committee responsible for vetting non-interest products, while a central oversight body at BoG will validate compliance with ethical and prudential standards.
Secular Approach:
Professor Gatsi reaffirmed the Bank of Ghana’s commitment to implementing non-interest banking through a secular and neutral approach. The central bank plans to deploy this within a secular economy with rules ensuring market neutrality. Implementation will begin on a phased basis, initially excluding microfinance, rural, and community banks to allow for controlled management before expansion.
“We are deploying this within a secular economy, and therefore there are rules to ensure that the market remains neutral,” Professor Gatsi stated. He emphasized that starting small allows regulators to identify challenges early, strengthen compliance systems, and build institutional capacity before expanding to other financial sector segments.
The framework requires institutions to avoid names or branding that suggest religious association, whether Islamic or Christian, to preserve market neutrality. Non-interest banking in Ghana will be driven by ethical financial practice and inclusivity rather than religious identity.
Type of licenses and capital requirement:
The Bank of Ghana advisor revealed that two types of licenses will be introduced under the framework. A window license will allow conventional banks interested in offering non-interest products to do so, while a full non-interest banking license will be available for institutions operating exclusively under non-interest principles.
The regulatory design includes two types of licenses for market participants. Conventional banks wishing to offer non-interest products will apply for a window license, while institutions planning to operate entirely under non-interest principles will require a full non-interest banking license.
Capital requirements for establishing non-interest banks will strictly follow existing prudential and regulatory standards under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930). Institutions must be fully incorporated in Ghana and have their capital sources thoroughly verified under BoG oversight.
Inter-Agencies collaboration:
BoG is collaborating with the Securities and Exchange Commission (SEC) and National Insurance Commission (NIC) to harmonize regulations on Sukuk (non-interest bonds) and Takaful (non-interest insurance). Professor Gatsi explained that a joint committee has been formed to ensure synchronized guidelines across banking, capital markets, and insurance sectors.
This development is expected to attract new investment flows, promote ethical banking, and contribute to Ghana’s financial stability.
Transparency and disclosures
Transparency and disclosures are integrated in the non-interest banking guidelines
regarding product development, financial contracts and regulatory approval to protect consumers.
Contracts shall disclose all terms and obligations between the bank and customers before signing and implementation. The Non-interest Advisory Committees are required to provide an independent periodic report meant to ensure transparency and protection of consumers. Consumer protection is therefore a focal consideration in the guidelines. In addition, there are well- trained examiners and supervisors to ensure consumers are protected.
Experts remarks:
According to industry experts, Ghana’s measured approach is prudent and well timed.
Nigeria’s non-interest banking sector, anchored by institutions such as Jaiz Bank and TAJBank, faced early skepticism but has since demonstrated strong performance and resilience within a secular regulatory framework guided by strong governance and public education.
Attahiru Maccido, Managing Director and Chief Executive Officer of One 17 Capital Limited in Nigeria, explained that non-interest finance models could help Ghana mobilize patient capital for long term sectors such as infrastructure, agriculture, and small business development. He emphasized that non interest banking represents not just an alternative form of finance but a tool for inclusive growth and financial stability.
Meanwhile, Dr. Shaibu Ali, Director General of the Islamic Finance Research Institute of Ghana, emphasized that non-interest banking transcends merely removing interest to redefine financial ethics. Every transaction must have an underlying asset, and speculative or unethical activities are strictly prohibited. Citing recent research, he observed that while 71 percent of Ghanaians are aware of non-interest banking, fewer than 30 percent fully understand how it works, highlighting the need for capacity building and professional certification.
Commercial banks readiness
From the commercial banking perspective, Sina Kamagate, Executive Head of Retail Banking at GCB Bank PLC, pointed out that demand already exists for ethical and interest free products. GCB Bank has customers who decline interest payments on their accounts, demonstrating that offering non-interest banking services will expand inclusion and cater to these customers’ values.
On his part, Kwame Abbey, Deputy Managing Director at Société Générale Ghana, has highlighted six key opportunity areas including retail inclusion, small and medium enterprise (SME) and agricultural finance, infrastructure funding through Sukuk, ethical and environmental, social, and governance (ESG) linked finance, digital innovation, and capacity development. He stressed that non-interest banking aligns closely with sustainable finance and could attract new investment flows into Ghana’s economy because it prohibits speculative activities and encourages real asset linkages.
Consequently, Robert Dzato, Chief Executive Officer of CIB Ghana, has reiterated the Institute’s commitment to professional development and ethical banking standards. He announced that CIB Ghana will lead in developing capacity building programmes to deepen understanding of non-interest banking among practitioners and regulators. A new certification programme on Non Interest Banking will be launched as part of the 2025 Bankers’ Week celebration.
By Adnan Adams Mohammed
