The Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has warned bank staff involved in fraudulent collateral arrangements that they will face severe disciplinary sanctions.
The warning comes amid growing concerns over the use of forged land documents and falsified ownership records to secure loans from financial institutions.
BoG Raises Alarm Over Fraudulent Collateral
Speaking at a meeting with Managing Directors and Chief Executive Officers of banks, Dr Asiama said the central bank had identified increasing fraud risks linked to collateral used for credit applications.
According to him, supervisory assessments have uncovered cases involving fraudulent land title documentation and questionable third-party collateral arrangements.
“The Bank has observed troubling instances involving fraudulent land title documentation which are being used to support credit applications,” he said.
He added that some properties had been pledged as collateral without the knowledge or consent of their legitimate owners.
“Properties have been pledged in some instances without the knowledge of legitimate owners. Ownership documents have been forged and consent letters have been falsified,” Dr Asiama revealed.
Risks to the Financial System
The BoG Governor cautioned that such practices pose serious risks to banks and the wider financial sector.
He explained that when collateral cannot be legally enforced, financial institutions face difficulties recovering loans, which can weaken their balance sheets and erode public trust.
“The implications are very severe. When collateral cannot be legally enforced, loan recoveries are compromised, balance sheets are weakened and public confidence is undermined,” he stressed.
Banks Urged to Tighten Controls
Dr Asiama directed bank executives to strengthen internal controls and enhance due diligence procedures to prevent fraudulent collateral arrangements.
He urged banks to adopt robust policies governing third-party collateral and enforce strict verification processes before approving loans.
“You have to act decisively. Banks must formalise robust policies governing third-party collateral. You must strengthen due diligence procedures and enforce strict verification standards,” he stated.
The Governor also called for swift disciplinary action against any staff found to have participated in or facilitated fraudulent activities.
“You must address control weaknesses and take decisive disciplinary action against any staff found culpable in such misconduct,” he added.
Strengthening Confidence in the Banking Sector
Dr. Asiama said combating fraud requires strong leadership from bank management and a culture of accountability across the industry.
He noted that the warning forms part of the Bank of Ghana’s broader regulatory reforms aimed at improving governance, risk management and public confidence in the banking sector.
According to him, safeguarding the integrity of the financial system remains essential for sustaining economic growth and maintaining financial stability.
