The Bank of Ghana (BoG) has proposed a new regulatory requirement that would compel banks to maintain sufficient high-quality liquid assets to cover their projected net cash outflows over a 30-day period of financial stress.
The proposal is contained in the Liquidity Coverage Ratio (LCR) Directive, 2026, an exposure draft published by the central bank on October 9, 2026, for consultation with the banking industry and the general public.
In a notice on its website, the BoG said the consultation was being conducted in accordance with its Procedures for Issuance of Directives, 2020. Interested stakeholders have until November 30, 2026, to submit their comments.
Under the proposed framework, banks would be required to maintain a minimum Liquidity Coverage Ratio of 100 per cent. This means their eligible, unencumbered high-quality liquid assets must be sufficient to cover their projected net cash outflows over the next 30 calendar days under prescribed stress conditions.
The central bank said the measure is intended to strengthen banks’ ability to withstand sudden funding pressures, meet financial obligations during periods of stress and reduce the risk of liquidity problems spreading across the financial system.
How the proposed requirement would work
The LCR would be calculated by dividing a bank’s stock of eligible high-quality liquid assets by its total projected net cash outflows over a 30-day period.
To qualify, the assets must be readily convertible into cash with little or no loss of value and must not be subject to restrictions that would prevent their use during a financial crisis.
The draft directive identifies cash, qualifying balances held with the Bank of Ghana and eligible government securities as potential components of banks’ liquidity buffers. Other eligible securities may also qualify, subject to specified conditions and regulatory discounts, known as haircuts.
The proposed framework also places limits on the composition of these assets. Level 2 assets would be capped at 40 per cent of the total stock of high-quality liquid assets, while Level 2B assets would be limited to 15 per cent.
Banks would additionally be required to assess potential cash outflows arising from deposit withdrawals, reduced access to wholesale funding, maturing financial obligations and customers drawing on previously committed credit facilities.
The draft also requires banks to conduct internal liquidity stress tests, including scenarios that are more severe and extend beyond the minimum 30-day supervisory period.
Implementation timeline and reporting requirements
The BoG has proposed September 1, 2027, as the effective date for the directive, with banks expected to align their internal policies, processes and systems with its provisions by August 31, 2027.
The draft further provides for a one-year pilot period following publication, during which banks would submit quarterly reports to the central bank using prescribed templates. Monthly reporting would be required after the pilot period.
These arrangements are intended to help the regulator monitor banks’ liquidity positions and assess their compliance with the proposed requirements.
BoG invites public comments
The central bank is inviting banks and other interested stakeholders to review the proposed framework and submit recommendations before the directive is finalised.
Submissions must be sent to [email protected] by November 30, 2026.
The BoG said it would consider all material comments received and provide written explanations of how they were addressed in the final directive, including whether the recommendations were incorporated.
The consultation provides an opportunity for banks and other stakeholders to identify potential implementation challenges and propose adjustments to the framework.
Part of broader banking-sector reforms
The proposed LCR requirement forms part of the BoG’s broader efforts to strengthen liquidity risk management across Ghana’s banking sector.
According to the exposure draft, the directive is intended to complement the Liquidity Risk Management Directive, 2026, and the Liquidity Monitoring Tools Directive, 2026, by establishing a quantitative minimum for short-term liquidity buffers alongside additional monitoring measures.
If adopted, the framework could require banks to review their treasury operations, asset allocation, liquidity forecasting and regulatory reporting systems to ensure compliance.
The extent of these changes will depend on the final provisions approved by the central bank following the consultation process.
The proposed directive therefore marks a further step in the regulation of bank liquidity in Ghana, with the final requirements expected to influence how financial institutions prepare for and respond to periods of financial stress.
