SANCTIONS FOR NON-COMPLIANCE WITH PRUDENTIAL REQUIREMENTS

Regulatory Concern

Section/
Source

Offence/Non-Compliance

Compliance Criteria

Sanctions/Penalties To Be Applied

Unauthorized Banking

Section 4(1)
No person shall carry on the
Carrying on the business of
Banking Act,
business of banking except by banking without a licence
2004 (Act 673) or under the authority of a
licence issued in accordance
with the Banking Act, 2004 (Act
673)

Contravention is an offence and is

liable on summary conviction, in the
case of a body corporate or other body
of persons to a fine not exceeding
3000 penalty units; In the case of an
individual to a fine not exceeding 3000
penalty units or to a term of
imprisonment not exceeding 10 years.
Section 4(2) Banking Act, 2004 (Act
673)

Invitation to public to
subscribe shares

Section 7(1)
The promoters of a bank shall
Banking Act,
not invite capital through public
2004 (Act 673) issue of shares for the purpose
of a proposed banking business
unless a provisional approval
has been given

Inviting capital through public

issue of shares without a
provisional approval of a
banking licence

Contravention is tantamount to an
offence and on summary conviction
culprit is liable to a fine not exceeding
1500 penalty units Section 7(2)
Banking Act, 2004 (Act 673)

Restrictions on
commercial, agricultural
or industrial activities

Section 12(1) A bank is not to engage in any

Banking Act,
commercial, agricultural or
2004 (Act 673) industrial undertaking unless it
establishes a subsidiary for the
purpose

Engaging in commercial,
agricultural or industrial
undertaking without firm's
subsidiary

Contravention of this section is

tantamount to committing an offence
and on summary conviction a fine not
exceeding 1500 penalty units can be
imposed Section 12(8) Banking Act,
2004 (Act 673)

Page 1

Section 12(2) The equity capital invested in a Exceeding the single

Banking Act,
subsidiary shall not exceed subsidiary or subsidiaries
2004 (Act 673) 15% of the net worth of a bank; - equity investment limits
25% of net worth of a bank with
more than one subsidiary

Section 12(3) The aggregate amount of any loan, Exceeding single subsidiary
advance, credit or other facility and or subsidiaries total
Banking Act,
2004 (Act 673) e equity capital shall not exceed
exposure limits
25% of the net worth of a bank
where the bank owns one
subsidiary and 35% of net worth
where the bank has more than one
subsidiary

Display of banking
licence

Section 12(4) Unless for the provision of

Banking Act,
premises or housing the
2004 (Act 673) business or staff of the bank or
for providing amenities for the
staff, a bank shall not build,
purchase or take lease of
immovable property

Building, buying or leasing

property for an unallowable
purpose

Section 19(1) A bank shall display at its head

Banking Act,
office and all its branches and
2004 (Act 673) agencies, copies of the banking
licence for the information of the
public

Contravention of this section

will lead to a bank paying a
fine of 100 penalty units to
BOG

Page 2

Places of business to be Section 20(1) A bank shall not carry on

licensed
Banking Act,
banking business at a place
2004 (Act 673) which is not a place authorized
in accordance with the act

Opening, relocating or
carrying on banking business
at a premises not authorized
by BOG

Contravention is an offence and bank

is liable on summary conviction to a
fine not exceeding 1000 penalty units
Section 20(3) Banking Act, 2004 (Act
673)

A foreign bank setting up a

representative office in
Ghana without BOG's
approval

The foreign bank commits an offence

and is liable to a fine not exceeding
2000 penalty units Section 21(4)
Banking Act, 2004 (Act 673)

Section 21(3) A permitted representative office A permitted representative

Banking Act,
shall not transact any form of
office transacting banking
2004 (Act 673) banking business in Ghana
business in Ghana

The foreign bank commits an offence

and is liable to a fine not exceeding
2000 penalty units Section 21(4)
Banking Act, 2004 (Act 673)

Section 20(2) A bank shall not open or

Banking Act,
relocate a branch, an agency, a
2004 (Act 673) mobilization centre; its head
office unless authorized by BOG

Opening of
Representative office

Changes of regulations
of banks

Section 21(1) A foreign bank incorporated

Banking Act,
abroad shall not set up a
2004 (Act 673) representative office in Ghana
without the approval of BOG

Section 22(1) Prior to making an amendment

Banking Act,
to its regulations or other
2004 (Act 673) instruments, under which it is
established the bank has to
furnish the BOG particulars of
the proposed amendment for
approval

Page 3

Changing regulations without A bank that contravenes provisions of

approval of BOG
this section shall be liable to a fine not
exceeding 2500 penalty units Section
22(3) Banking Act, 2004 (Act 673)

Solvency, Capital
Adequacy Ratio

Section 23(1)
Banking Act,
2004 (Act 673)
Section 23(2)
Banking Act,
2004 (Act 673)

Non-compliance with
capital requirements

Section 26(1) A bank that fails to maintain

Failing to notify BOG
Banking Act,
CAR should promptly (within 24 promptly
2004 (Act 673) hours) notify BOG

10

Banks are to maintain a CAR of Maintaining CAR of less than

10% at all times
Particular
10% or any other prescribed
banks or all banks may be
level
directed by BOG to hold a
higher capital ratio
.

Section 29(1) Banks to transfer specified

Banking Act,
percentage to reserve fund out
2004 (Act 673) of annual profits

Bank not to declare

dividends

A bank that contravenes this provision,

commits an offence and is liable on
summary conviction to a fine not
exceeding 1000 penalty units Section 26(2)

Not transferring or
transferring less than the
specified percentage of
annual profits

Bank commits an offence and is liable

on summary conviction to a fine net
exceeding 1000 penalty units Section
29(2) Banking Act, 2004 (Act 673)

Section 30(1) Bank not to declare or pay

If dividend is declared or
Banking Act,
dividend on its shares unless:- paid in contravention of
2004 (Act 673) 1. Capitalized expenditures is
subsection (1)
completely written off; 2.
Provision has been made for
erosions in asset values; 3. CAR
requirement has been met; 4.
Accumulated operating losses
are completely written off

Each director is liable to pay a penalty

of not less than 100 penalty units. A
bank in contravention of this section
commits an offence and is liable on
summary conviction to a fine not
exceeding 1000 penalty units Sections
(5) & (6) Banking Act, 2004 (Act 673)

Transfer of profits to
Reserve Fund
11

Penalty of per mille of deficiency per

day. Section 27(1). Each director and
CEO of a bank that fails to comply with the
minimum capital ratio commits an offence
and is liable on summary conviction to a
fine not exceeding 500 penalty units

Page 4

12

Section 31(3) Bank to submit to BOG a report

Banking Act,
on the liquid assets of the bank
Submission of returns on 2004 (Act 673) as BOG may require
liquidity
Failure to submit return

13
Notification of noncompliance

14

Section 32
A bank should notify BOG
Banking Act,
promptly of non-compliance with Failure to notify BOG
2004 (Act 673) liquidity requirements
promptly of non-compliance
with liquidity requirements

Section 33 (1)
Banking Act,
Banks are to hold liquid assets
Compliance with liquidity 2004 (Act 673) in accordance to BOG's
requirements
requirements

Bank is liable to pay to BOG a fine not

exceeding 250 penalty units. Section
31(5) Banking Act, 2004 (Act 673)

Bank shall be liable to a fine not

exceeding 250 penalty units

BOG to charge interest on the

deficiency at a rate to be determined
Failure to hold required liquid by BOG. S33(1) Banking Act, 2004
assets
(Act 673)
BOG may direct discontinuation or
limitation of granting credit, making
investments of capital expenditure
Section 33(2)(a) Banking Act, 2004
(Act 673)
The bank may be asked not to pay
dividend Section 33(2)(b) Banking Act,
2004 (Act 673)

Page 5

Directors or CEO or both may be

asked to pay a levy of per mille of
the deficiency per day or any other
amount that BOG may consider
appropriate Section 33(7)
Section 33(3)

15 Transfer of shares of a
significant shareholder

Bank makes fresh advance Bank shall pay a fine not exceeding
during existence of
500 penalty points to Bank of Ghana
deficiency in liquid assets
Section 33(3)
without approval of the Bank
of Ghana
Contravention of Section
33(1)

A penalty of per mille of the

deficiency per day Section 33(4)(a)

Contravention of Section
33(3)

A fine of not less than 40 penalty units

per day Section 33(4)(b)

Section 33(5)

BOG may require specified

information in an appropriate
form from any bank in Ghana

Bank fails to furnish the

information required

Bank to pay a fine not exceeding 250

penalty units per day of default

Sections 34
and 35

BOG to be given 3 months'

notice of disposal or acquisition
of shares affecting significant
shareholding and prior approval
of the BOG obtained

Acquisition or disposal of
whole or part of significant
shareholding either without:a. 3 months notice or
b. BOG's approval or
c. in spite of BOG's
disapproval

BOG may by directive in writing

a. annul the transfer
b. prohibit the
voting rights in respect of the shares
c. prohibit payment of dividends in
respect of the shares,
d. Prohibit
the issue of 'bonus shares' or rights
issue in respect of the shares Section
37(1) BA 2003

Page 6

16 Disqualification of
Directors, officers or
employees

Section 38(1) Certain categories of persons

Banking Act,
are excluded from appointment
2004 (Act 673) as a director, chief executive
officer or employee of a bank

17 Disclosure of interest

Section 39
A director of a bank shall
Interest in other firms or
Banking Act,
disclose, whether direct or
transactions or contracts
2004 (Act 673) indirect, his professional or
before Board is not disclosed
investment interest in other firms
or in any transactions the bank
wishes to undertake with 3rd
parties

18 Appointment of chief
Section 40(1)
executive officer and his BA 2001
deputy

19 Advances against
security of own shares

Bank to give BOG prior notice

before it appoints MD or DMD

Disqualified person
accepting position as a
director, chief executive
officer, or employee of a
bank

A person contravening this disclosure

requirement ceases to be a director
and any approval made under the
contravention becomes void Section
39(6) Banking Act, 2004 (Act 673)

Failure to give BOG prior

Bank to pay a fine of 1000 penalty
notice before appointment of units to BOG Section 40(6) Banking
CEO or his deputy
Act, 2004 (Act 673)

Section 40(4)

BOG should be promptly

Failure to promptly notify
notified of changes of members BOG of changes in Board
of the Board of directors
membership

Section 41(1)
BA 004

Banks not to make advances,

loans or credits against security
of own shares, shares of
holding company or its
subsidiaries or shares of any of
its own subsidiaries

Page 7

The person commits an offence and is

liable on summary conviction to a fine
not exceeding 250 penalty units or a
term of imprisonment not exceeding 12
months Section 38(3) Banking Act,
2004 (Act 673)

Granting advances, loans or

credits against securities of the
shares of the bank or its
subsidiaries or shares of its
holdings company or any of its
subsidiaries

Bank to pay fine of 1000 penalty units

to BOG. Section 40(6) BA2004

A bank that contravenes this provision

commits a crime and is liable on
summary conviction to a fine not
exceeding 1000 penalty units. Section
41(2) Banking Act, 2004 (Act 673)

Section 42(1) A bank shall not take financial

Banks taking single
Contravention of this section will result
exposure in r respect of one person customer or single group
Banking Act,
in a fine of 1000 penalty units Section
2004 (Act 673) or group of persons which constitute exposures of more than 25% 42(4) Banking Act, 2004 (Act 673)
in the aggregate 25% of the net
secured or more than 10%
own funds of the bank for secured
unsecured

20

Limit on exposures

exposures and 10% for unsecured

exposures

21 Restriction of exposures Section 43(1) A bank shall not take an

Banking Act,
unsecured financial exposure in
2004 (Act 673) respect of
a. director(s) or
significant shareholders or their
relatives
b. Firms or companies in which
a director or a significant
shareholder is interested as
director, controlling shareholder,
partner, proprietor, employee or
guarantor
c. Its holding or subsidiary
companies in which a director is
interested unless the prior
approval of BOG is obtained
and approval is by the Board.
For secured financial exposures,
the Board is the only authority to
approve and the exposure should
not exceed 10% of the bank's net
worth Section 43(2)

Page 8

Bank having an unsecured

exposure to any of these
counterparties without
BOG's prior approval

A bank that contravenes shall pay a

fine of 1000 penalty units to BOG.
Section 43(5) Banking Act, 2004 (Act
673)

22 Restriction on lending to Section 44(1) A bank is not to grant to any of its

officers and employees any
staff
Banking Act,
2004 (Act 673) unsecured advances of credit

Granting unsecured credit to an

officer or employee of the bank
that exceeds 2 years salary of
facilities, the aggregate amounts of that employee or officer
which exceed 2 years salary of the
officer or employee

23 Lending to related parties Section 45 (1) In approving credits to any of

Banking Act,
the directors or executive
2004 (Act 673) officers of a bank, under
Sections 43 and 44, the bank
shall satisfy itself that

Where a bank gives credit to

a director or executive officer
who has lower credit
worthiness than normally
required or
a. the credit worthiness of
the person is not less than
normally required,
b. the term of credit is not
less favourable to the bank
and c. giving of the credit
is in the interest of the bank

Section 45(2)

Where a bank grants credit

that is not approved by at
least 3/4 of the board
membership or the approval
of which is not recorded in
the minutes book

Credit is to be approved by all

other directors of the bank at a
meeting where not less than
three quarters of all the directors
of the bank are present and the
approval is recorded in the
minutes book

Page 9

A bank that contravenes this provision is

liable to a fine of per mille of the over
exposure on that day plus a penalty not
exceeding 1000 penalty points Section
44(3) In case of credits granted to
executive officers of a bank or related
parties Section 43(1) and (5) shall apply

A bank that contravenes this provision

shall pay to the BOG a fine not
exceeding 1000 penalty units. Section
45(3) where the credit is less
favourable to the bank than those
normally offered or where the credit is
not in the interest of the bank

24 Establishment of
subsidiary company

Section 46(1) A bank shall not establish a

Where a bank establishes a
Banking Act,
subsidiary company without the subsidiary company without
2004 (Act 673) prior approval of the BOG
the prior approval of the
BOG

Such contravention shall make the

bank liable on summary conviction to a
fine not exceeding 1000 penalty units
Section 46(2) Banking Act, 2004 (Act
673)

25 Limits on investment in
respect of subsidiary
companies

Section 47(1) Equity invested in one subsidiary

shall not exceed 15% of net own
Banking Act,
2004 (Act 673) funds of the bank

Equity investment made in

one subsidiary exceeding
15% of net own funds

A bank that contravenes the provisions of

this section commits an offence and is
liable on summary conviction to a fine not
exceeding 1000 penalty units Section 47(4)

Section 47(2) Equity in all subsidiaries (where

Banking Act,
there is more than one) shall not
2004 (Act 673) exceed 25% of its net own
funds

Where there are more than

one subsidiary equity
investment in all the
subsidiaries exceeding 25%
of net own funds

Section 47(3)

The aggregate amount of

financial exposure shall not
exceed:- 25% of net own funds
where the bank has one
subsidiary or 35%of net own
funds where the bank has more
than one subsidiary company

Where aggregate financial

exposure exceeds 25% of
the bank's net own funds
whee the bank has one
subsidiary and 35% of the
bank's net own funds whee
the bank has more than one
subsidiary company

Section 48(1) Equity investment in a company

Banking Act,
other than a subsidiary shall not
2004 (Act 673) exceed 10% of the net own
funds of the bank

Equity investment in a nonsubsidiary institution which

exceeds 10% of the bank's net
own funds

26

Limits on investment in
respect of other
institutions

Page 10

A bank that contravenes this

subsection (1) is liable to pay BOG a
fine not exceeding 1000 penalty units.
Section 48(2) Banking Act, 2004 (Act
673)

27

Reporting of large
exposures

Section 49(1) A bank shall report to the BOG

Banking Act,
the particulars of each large
2004 (Act 673) financial exposure in the form
and at the intervals that BOG
may require

28

Directives

Section
52(1)&(2)
Banking Act,
2004 (Act 673)

29

Periodic Returns

Failing to send return as

required by BOG

A bank which fails to comply with

subsection (1) shall pay BOG a fine
not exceeding 1000 penalty units

The Bank of Ghana may issue

Failure of a bank to comply A bank which fails to comply with
directives to banks generally of
with the BOG directive
subsection (1) shall pay BOG a fine
specific to a bank for various stated issued under subsections (1) not exceeding 1000 penalty units.
purposes

& (2)

Section 53(1) BOG may for the purposes of

Banking Act,
supervision require a bank to
2004 (Act 673) submit to it any information of
data relating to any of the
bank's affairs, in the prescribed
form at an interval and within
the times that BOG may
stipulate

Page 11

Section 52 (4) Banking Act, 2004 (Act

673)

Any bank guilty of nonBOG may impose fines not exceeding

submission; incomplete
500 penalty units on the bank Section
submission, delayed submission 53(2) Banking Act, 2004 (Act 673)
or inaccurate submission of the
required information, data,
statement or returns

30

Power of on-site
examination

Section 56(1) Any duly authorized on-site

examiner shall have access to the
Banking Act,
2004 (Act 673) bank's books and records and the

When a bank or person fails to

give duly authorized on-site
examiner access to the bank's
bank shall cooperate and assist that books and records refuses to
person. He shall have the right to supply any information or
call upon any director, officer or any explanation required
or
other employee of a bank to furnish refuses to attend and testify in
that person any information and
regard of a matter under
explanation considered necessary examination
may order any bank official or
employee, orally on in writing, to
attend and testify in regard of a
matter under examination

Any non-compliance will make a bank

which or a person who is responsible
for the offence liable to an offence not
exceeding 1000 penalty points Section
56(5) Banking Act, 2004 (Act 673)

31

Verification of
Information

Section 58(1)

The Head of Banking Supervision Failure to provide the

may authorize any of its officials or authorized official access and
qualified auditors to verify any
facilities
return, information or data furnished
to it by that bank and report on its
accuracy

Bank will be liable to a fine not

exceeding 1000 penalty points Section
58(3) Banking Act, 2004 (Act 673)

32

On-site Examination
Report

Section 59(1)

The BOG shall furnish a bank

Failure to submit explanation Bank is liable to pay BOG a fine not
with a copy of its on-site
exceeding 1000 penalty points Section
examination report and call
59(2) Banking Act, 2004 (Act 673)
upon the bank to provide within
30 days from date of receipt a
written explanation on the
findings contained in the report
and actions taken within a time
specified by Bank of Ghana

Page 12

33

Follow-up action on onsite examination reports

Section 60(1) After examining a bank's

Banking Act,
explanation on an on-site
2004 (Act 673) examination report, the BOG
may issue a directive to a bank
to take the remedial action the
BOG may specify

Failure by the bank to comply

with the directive

The bank will be liable to a fine not

exceeding 1000 penalty units Section 60
(2)

34

Cooperation with the

conservator

Section 61(1)

Each director and official of a

bank is required to cooperate
and assist the conservator in
carrying out his responsibilities

A director or official who

obstructs the conservator in
the performance of the
conservators functions

A director or official obstructing a

conservator commits an offence and is
liable on summary conviction to a fine
not exceeding 500 penalty units or a
term of imprisonment not exceeding 2
years. Section 61(2) Banking Act, 2004
(Act 673)

35

Stoppage of operations
following revocation of
licence

Section 67(1)

Where BOG revokes a bank's

licence, the bank shall cease
operations

A bank continuing to operate

after its licence has been
revoked

Failure to stop operations after a

banking licence is withdrawn makes
every director liable on summary
conviction to a fine not less than 1000
penalty points or in default to a term of
imprisonment not exceeding 5 years.
Section 67(2)

36

Guidelines on accounting Section 70(1)

standards and disclosure
in annual accounts

BOG may lay down guidelines

to be followed by banks in
respect of accounting policies
and practices, presentation of
annual accounts, disclosure of
information in the annual
accounts

Bank that does not comply

Non-compliance will lead to a fine not
with guidelines laid down by exceeding 1000 penalty units being
BOG
paid to BOG. Section 70(2)

Page 13

37

Accounting records

Section 71(1) A bank should keep accurate and Bank not keeping accurate
reliable accounting records and the and reliable accounts and
Banking Act,
2004 (Act 673) account prepared from the records records
should give a true and fair view of
Accounting records kept
the state of affairs of the bank and
outside Ghana
its r results for the accounting
period

Contravention of Section 71 is an
offence and is liable on summary
conviction to a fine not exceeding 1000
penalty units. Section 71(3) Banking
Act, 2004 (Act 673)

Section 71(2) Accounting records to be kept in

Banking Act,
Ghana
2004 (Act 673)

38

Financial statements

Section 72(1) At the expiration of each

Banking Act,
calendar year, a bank is to
2004 (Act 673) prepare financial statements,
comprising balance sheet, profit
and loss accounts and cash flow
statements

Not preparing financial

statement at the end of the
calender year
Board of directors not
approving financial
statements
Financial statements not
signed by two directors

Non-compliance makes bank liable to

a fine not exceeding 1000 penalty
units Section 72(3) Banking Act, 2004
(Act 673)

39

Bank without an auditor

Section 75(1) A bank without an auditor for a

Banking Act,
continuous period of 3 months
2004 (Act 673) shall notify the BOG

Failure of bank to notify the

BOG

A bank which fails to notify the BOG

shall pay a fine not exceeding 1000
penalty units Section 75(3) Banking
Act, 2004 (Act 673)

Page 14

40

Termination of auditor's
appointment

Section 80(1) An auditor of a bank shall cease

Banking Act,
to be an auditor if their
2004 (Act 673) appointment is properly
terminated

An auditor that continues to

act as an auditor of a bank
even though their
appointment has been
properly terminated

An auditor who does not comply with

Section 80(1) commits an offence and
is liable on summary conviction to a
fine not exceeding 250 penalty units or
to a term of imprisonment not
exceeding 12 months. Section 80(3)
Banking Act, 2004 (Act 673)

41

Display of Financial
statements

Section 81(1) A bank shall display a. at its

Banking Act,
branches or agencies in a
2004 (Act 673) conspicuous place a copy of the
last audited financial statements
b. Not later than 3 months after
the end of a financial year
furnish the BOG with a copy of
its audited financial statements;
auditors statutory and long form
audit reports - causes the
financial statements together
with the auditor's certificates to
be published in a daily
newspaper circulating in Ghana

A bank not displaying last

audited account in all
branches and agencies - not
furnishing BOG or causing to
be published in a daily
newspaper circulating in
Ghana its financial status
within 3 months of the end of
a calendar year

Non-compliance will make the bank

liable to a fine not exceeding 1000
penalty units Section 81(2) Banking
Act, 2004 (Act 673)

42

Prohibition of floating
charge

Section 82(1)

A bank that creates a

A bank that creates a floating charge
floating charge on a property over its property commits an offence
of the bank or part thereof
and is liable on summary conviction to
a fine not exceeding 1000 penalty
points Section 82(3) Banking Act, 2004
(Act 673)

A bank shall not create a

floating charge on any
undertaking or property of the
bank or part of the property of
the bank

Page 15

43

Net Open Position

A bank shall not have a net

open position exceeding 15% of
its net worth on any day in any
single currency or 30% of its net
worth in aggregate (all foreign
currencies

Page 16

A bank holds a net open

Bank is to pay a penalty of per mille
position of more than 15% in of excess per day
any currency or an
aggregate NOP of more than
30% on a particular day