BoG Moves to Allay Fears Over Non-Interest Banking Framework
The Bank of Ghana (BoG) has sought to calm growing public debate over its proposed Non-Interest Banking (NIB) framework, stressing that the policy is secular, inclusive, and intended to broaden financial choice rather than advance any religious agenda.
In a detailed clarification, the central bank explained that the framework emerged from extensive stakeholder consultations and was not designed around faith-based considerations. It said the term “Non-Interest Banking” itself was adopted following engagements with a wide range of stakeholders, including Christian and Muslim leaders, to reflect commonly agreed principles rather than religious doctrine. According to the Bank, non-interest banking in Ghana, as practised globally, is open to all individuals and businesses irrespective of religious affiliation.
The framework defines Non-Interest Banking as a model that excludes interest-based transactions, excessive uncertainty, and speculative activities akin to gambling, while ensuring that financial products are anchored in real economic assets and productive activity. It allows for the establishment of fully-fledged non-interest banks, as well as non-interest “windows” within conventional banks, subject to strict segregation of funds and operations. The central bank cautioned that funds from non-interest windows cannot be diverted to conventional banking activities without its prior written approval.
Strong governance and oversight arrangements form a central pillar of the policy. Each non-interest banking institution is required to set up a Non-Interest Banking Advisory Committee (NIBAC), while the Bank of Ghana will oversee a Non-Interest Financial Advisory Council (NIFAC) to guide regulation, review proposed products, and approve operational structures. Consumer protection safeguards are also embedded in the framework, with customers in profit-sharing arrangements required to formally acknowledge their exposure to financial risk, except where losses result from negligence or misconduct by the institution.
Despite these assurances, the framework has attracted criticism from some policy analysts. Bright Simons, Vice President of IMANI Africa, has argued that the approach attempts to strip Islamic finance of its religious identity while retaining its substantive principles. He described the policy as “too clever by half,” warning that banning religious symbols and language does not fully resolve what he termed an underlying identity conflict within the regime.
Simons also questioned whether Ghana’s existing commercial and banking laws are sufficiently equipped to adjudicate profit-sharing and partnership-based contracts commonly associated with Islamic finance models. He further cautioned that restricting non-interest banks from participating in interest-bearing instruments such as Treasury bills could undermine their competitiveness and create liquidity and operational challenges.
