The Ghana Association of Bankers (GAB) announced on Thursday that its members are prepared to suspend all new payroll-based lending to public sector workers, citing a three-month delay in the remittance of loan deductions by the Controller and Accountant-General’s Department (CAGD).
The banks say the CAGD has been deducting loan repayments from the salaries of teachers, nurses, doctors, and other public servants but failing to transfer the funds to lenders.
This has forced banks to absorb the cost of loans that are technically being repaid by the borrowers, creating significant financial strain.
“The situation is putting pressure on lenders, forcing them to absorb avoidable impairments,” said GAB CEO John Awuah at the association’s 43rd annual general meeting in Accra.
“And that is why we are likely to, in the coming days, take that very difficult decision to stop all Controller-driven payroll-based lending.”
The proposed action is directly linked to the Bank of Ghana’s (BoG) deadline for banks to reduce their Non-Performing Loan (NPL) ratio to 10% by December 2026. The industry’s NPL ratio stood at 15.7% in August 2026, well above the target.
Awuah noted that the delay in remittances has been a recurring problem for over a decade, requiring constant engagement with the CAGD.
A temporary resolution was reached two months ago following intervention from the Ministry of Finance, but the issue has since resurfaced.
The BoG Governor, Dr Johnson Pandit Asiama, who spoke at the same event, reminded banks of the fast-approaching deadline and urged them to strengthen their credit management and recovery processes.
