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BoG Penalizes PSPs for enrolling institutions without approval

Bank Of Ghana
Bank of Ghana

Techfocus24 has learnt that the Bank of Ghana has slapped various amounts of fines on some Payment Service Providers (PSPs), who onboarded micro-credit and microfinance institutions without confirming the status of those institutions with the central bank.

In a letter dated April 3, 2024, addressed to “All Payment Service Providers”, the BoG noted that some PSPs have onboarded financial services institutions such as micro-credit and microfinance institutions without obtaining prior confirmation of their regulatory status from the BoG and approval to engage in their proposed services.

The BoG said the practice violates the Payment Systems and Service Act, 2019, Act 987 and also poses significant risks to the financial ecosystem.

Even though the letter, signed by the Head of Fintech and Innovation Office of BoG, Kwame Oppong, did not mention the fine, Techfocus24 learnt from some affected PSPs that they were fined for the violation, but they stopped short of mentioning the specific amounts involved.

The central also cautioned all PSPs to “conduct Enhanced Due Diligence (EDD) on all current and prospective financial service partners” before onboarding them.

It said the EDD process must include a comprehensive assessment of their license status as well as confirmation of their authorisation from the BoG to participate in their proposed activities.

“Your prompt attention to this matter and full cooperation in implementing the necessary compliance are imperative to ensure the safety and integrity of the financial service industry,” the letter said.

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