Hold on tight, because we’re about to delve into the thrilling world of financial supervision and regulatory.
The Bank of Ghana (“BoG”) has overall regulatory and supervisory authority over all banking and non- banking financial businesses. The regulatory and legal framework within the banking and finance industry is governed by the Banks and Specialised Deposit-Taking Institutions Act,2016 (Act 930) (BSDI Act) and the Non-Bank Financial Institutions Act 2008 (Act 774) (NBFI Act).
Today, we will be focusing on Non-Bank Financial Institutions or NBFIs.
First of all, what are NBFIs? In simple terms, a NBFI is a financial institution that offers bank-like financial services but do not hold a banking license. In Ghana, NBFIs are governed by the NBFI Act.
The NBFI Act set out the following as Non-Bank Financial Services:
- Leasing Operations;
- Money lending operations;
- Money transfer services;
- Mortgage finance operations;
- Non-deposit-taking microfinance services;
- Credit Union operations; and
- Any other services or operations as the Bank of Ghana may from to time by notice designate as such.
According to the NBFI Act, NBFIs are required to have a valid license issued from BoG. A person shall not be licensed to provide a non-bank financial service unless that person is a body incorporated in Ghana with the sole authorized business of carrying on of a non-bank financial service; or in the case of a credit union registered and incorporated.
A licensee shall at all times display the licence or copies of the licence, its name and a statement of the fact that it is licensed to carry on business in a legible manner on the premises at which it carries on business on the premises at which it carries on business.
It is worth noting that Non-Bank Financial Institutions licenses can be revoked and restricted by BoG.