Banks are threatening to suspend new lending to public sector workers whose salaries are processed through the Controller and Accountant-General’s Department (CAGD) due to delays in the remittance of loan deductions to the lenders.
Led by the Ghana Association of Bankers, the banks maintained that so far, the remittances of loan deductions to lenders were in arrears for three months, although the CAGD had deducted the amounts from the salaries of public sector workers.
The proposed action, if implemented, could affect teachers, nurses, doctors and other public sector workers who rely on payroll-based loans to meet personal and household financial needs.
The situation was putting pressure on the banks and forcing them to absorb avoidable impairments.
The threat comes nearly two months before the Bank of Ghana’s December 2026 deadline for banks to bring their Non Performing Loans (NPL) ratios down to 10 per cent.
The proposed suspension of payroll-based lending is, therefore, one of the measures the banks intend to adopt to limit further deterioration in asset quality.
The situation is particularly concerning because the salaries of public sector workers get paid and the loan deductions are made, meaning the outstanding obligation is for the CAGD to transfer the money to the banks.
Sometimes the banks have to wait three months for the remittances to be done.
The Daily Graphic is deeply concerned by this development, and we unreservedly condemn the chronic failure at the CAGD.
Let us call it what it is: this is not mere delay. It is a breach of trust.
When a teacher in Tamale or a nurse in Ho takes a salary loan, she signs an agreement that the CAGD will deduct at source and pay the bank.
Her salary is cut.
On her payslip, it shows she has paid. Yet, the money sits somewhere in government coffers for three months.
Meanwhile, the bank’s system marks her as a defaulter, interest accrues, her credit record is damaged, and she may be harassed by recovery officers for a loan she has already paid.
How can this be acceptable in a country that talks about financial inclusion and decent work?
For more than 10 years, by the admission of the bankers, this has gone on. Successive Controllers, successive Ministers of Finance, have allowed this rot. It is administrative negligence with real consequences.
The implications are severe.
First, it hurts workers. Public sector workers — teachers, nurses, doctors, civil servants, police officers — rely on payroll loans because their salaries are low and irregular costs are high.
They use these loans for school fees, medical bills, rent advances and family emergencies.
If banks suspend lending, they will be pushed into the arms of high-interest money lenders and loan sharks, worsening indebtedness.
It also hurts banks and the economy. Payroll loans are the safest form of consumer lending because repayment is guaranteed at source.
If even these loans are classified as non-performing because CAGD refuses to transfer the money, banks’ NPL ratios rise artificially.
Banks must then provide more, lend less, and charge higher rates to everyone else.
It undermines the very stability that the Bank of Ghana is trying to enforce.
Additionally, it destroys confidence in the public payroll system.
If government cannot be trusted to transfer deducted monies to banks, why should anyone trust the CAGD with pensions, insurance premiums and union dues?
We are eroding the credibility of the state.
What must be done?
The CAGD must clear the three-month arrears within days, not weeks, with interest to the banks for the delay.
In this age of GIFMIS and digital payments, there is no reason for manual transfers that sit for months.
Deductions should be transferred to banks within 48 hours of salary payment, automatically.
Who benefits from holding onto billions of cedis of workers’ loan deductions for three months?
Where does the float sit, and what interest does it earn?
The Auditor-General must audit this practice.
If there is misapplication of funds, those responsible must be sanctioned.
The Bank of Ghana must not punish banks for NPLs that are not their fault.
In measuring the 10 per cent target, the central bank should distinguish between genuine default and CAGD-induced default.
Otherwise, banks will be forced to punish workers for the sins of the Government.
On World Teachers’ Day, teachers are on strike because promotion arrears are not paid.
On the same day, banks say they will stop lending to teachers because loan deductions already made are not transferred.
This is how low we have sunk in treating our public workers.
Government must act now. Pay what you have taken.
Restore trust.
