CEOs of Rural & Community Banks to Sue Bank of Ghana Over “Unconstitutional” Corporate Governance Laws

There is a brewing legal tussle between Ghana’s rural banking sector and the Bank of Ghana (BoG) as leaders of the Rural and Community Banks (RCBs) threaten legal action over a regulatory directive they claim will prematurely end the tenure of several long-serving chief executives.

The Chief Executive Officers of the RCBs are accusing the central bank of enforcing corporate governance principles that undermine existing employment contracts and violate constitutional provisions against retrospective laws.

The issue was topical at the 24th Annual CEOs Conference of Rural and Community Banks in Takoradi.

The President of the RCBs’ CEOs Association, Alhaji Awudu Ibrahim, says they have tried all the means, including numerous dialogues, to plead with the Bank of Ghana to reconsider that portion of the corporate governance directives.

“For the past three and a half years, we have restrained ourselves in dialogue, engaging them, bringing out the difficulty we have with that particular paragraph. If we fail to get them to respond or revisit it, we have barely less than six months,” the President of the CEO’s Association said.

The association argues that the directive in question reportedly imposes a fixed tenure limit for bank CEOs and board members, compelling some of the sector’s most experienced leaders to step down, regardless of when they were appointed or the terms of their contracts.

The president further indicated that the rule, without any adjustments, could destabilize the rural banking ecosystem, which relies heavily on institutional memory, long-term relationships, and deep community trust built over decades.

Since persuasion and dialogue are failing, the CEOs disclosed that their lawyers have been instructed to file a suit should the BoG fail to amend the controversial provision, seeking a declaration from “a court of competent jurisdiction” on whether the central bank’s directive is legally sound.

“We are heading to the courts. In fact, our lawyers have our instructions to proceed to the court and then we can go there and ventilate our concerns so that we can get, I mean, the declaration from the Court of Competent Jurisdiction, whether we are right or the position of BoG is the position of the law,” he indicated.

This legal battle marks an open challenge to the central bank’s authority from a regulated industry group and signals deepening tensions over the implementation of the BoG’s corporate governance directives.

Experts who support the BoG’s directive say the BoG’s reforms are meant to ensure transparency and curb managerial excesses; however, the RCBs’ pushback underscores the delicate balance between regulation and operational autonomy, particularly in community-based banking, where leadership continuity is key.

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