Banks could sue the Controller and Accountant-General’s Department (CAGD) over loan repayments deducted from public workers’ salaries but not passed on, banking consultant Dr Richmond Atuahene has said.
His comments raise the stakes in a dispute that could cut off credit to hundreds of thousands of teachers, nurses, doctors and other government employees. The Ghana Association of Banks (GAB) has warned that its members may stop new lending to workers paid through the CAGD payroll within weeks unless the backlog is cleared.
GAB Chief Executive John Awuah said deductions for loan repayments had already been taken from workers’ pay but not remitted to lenders, and that the arrears stretched back three months as of October. Banks, he said, were being forced to book impairments on debts that should have been settled.
The pressure comes as the Bank of Ghana pushes lenders to bring their non-performing loan ratio down to 10 per cent. Unremitted deductions show up on banks’ books as unpaid loans, even though borrowers have had the money taken from their salaries.
Atuahene said the CAGD’s role is to deduct repayments and pay them over to lenders, and that holding on to money already taken from workers raises questions of contract and accountability. He questioned how deductions could be made without the funds reaching the banks and asked whether the delays were deliberate. Banks could consider legal action against the CAGD and possibly the Finance Minister, he said.
Whether such a claim would succeed would turn on the agreements governing payroll deductions, the CAGD’s statutory duties and evidence of what was deducted and what remains unpaid. Naming a minister or official as a defendant would not on its own establish personal liability.
Atuahene said the delays had already cost lenders. He cited an unnamed savings and loans company that he said wrote off about GH¢6 million in 2024 because expected repayments never arrived. The money at risk ultimately belongs to depositors, he said, and bad loans rise when it is withheld. “If you don’t pay, what is it? The non-performing goes up,” he said.
He urged President John Dramani Mahama’s government to step in, warning that the delays threaten lenders’ balance sheets and could restrict credit to public sector workers who rely on salary-backed loans.
Payroll remittance delays are not new. Graphic Business reported in 2014 that the CAGD owed public workers about GH¢300 million in pension contributions it had deducted but not paid over, a gap a senior official at the time blamed on government liquidity problems.
The CAGD has not publicly responded to the banks’ complaint. GAB has not said when it will decide on suspending lending.
