The Bank of Ghana (BoG) says it cannot assist depositors to retrieve their funds from the 70 microfinance companies whose licenses were recently withdrawn.

Outgoing Head of Other Financial Institutions at BoG, Raymond Amanfo, says the central bank is limited by current laws.

He explains the laws make it difficult for the central bank to assist clients of the non-bank financial institutions that have not received full permit to operate.

The central bank on Tuesday announced it has revoked licenses of some 70 microfinance and money lending companies.

The BoG said in a statement that the action was influenced by expiration of the provisional license that was given to these 70 companies to operate.

According to the current BoG rules, persons wanting to conduct Banking business or microfinance are often given a provisional license – or an ‘approval in principle’ – to operate prior to another permit that allows full operations.

Licenses to commence full operations are usually provided by the BoG after six months – when the institutions meet conditions stated under the ‘approval in principle’ letter.

The provisional licenses, according to the Bank of Ghana, do not permit the financial institutions to take deposits.

“So far as we are concerned once [the banned financial institutions] were not allowed to take deposits; if they are taking deposits it is an illegality. The fact of the matter is that they are not supposed to take deposits”, Mr Amanfo Joy Business' George Wiafe.

He said had the BoG gotten a wind that the financial institutions were taking deposits with the provisional license, the security agencies would have been alerted.

“If a company is doing an illegal business, my duty is to warn the public that it is doing an illegal business and hand them over to the security to deal with it. Because under the laws I operate, I don’t have power to prosecute,” Mr Amanfo told Joy Business.