The Director of Communications of the Bank of Ghana, Bernard Otabil, has clarified that the bank worked closely with GN Bank during its liquidity challenges, and also after its request to be reclassified as a Savings and Loans company, and that the revocation of its license was based on sound judgment to protect the sanctity of the banking sector.

“We tried to take our time with the case of GN Bank. When depositors started shouting all over the country because the Savings and Loans company could not meet depositors withdrawals it was time to act!”, Mr Otabil said.

There are available media reports on claims of depositors’ agitation before the revocation of the license.

Explaining further, Mr Otabil said: “Aside from the reported cases in the media, the Financial Stability Department of the Bank of Ghana received complaints of the company’s inability to pay their deposits on demand. To ensure an orderly exit of the company and protect the sanctity of the banking sector, the company’s license had to be withdrawn per the provisions of the Banks and Specialized Deposit-Taking Institutions, Act 2016 (Act 930)”.

According to Mr Otabil, the Bank of Ghana has provided details on the various infractions that led to the revocation of the license of GN Savings and Loans Company.

GN Bank, unable to meet the new minimum regulatory capital requirement of GHS400 million by the end of 31 December 2018 applied to the Bank of Ghana for a reclassification to a Savings and Loans Company, a request which the Bank obliged. However, the license of the Savings and Loans Company was revoked in August 2019 when the Bank of Ghana realized that the company still had liquidity challenges with customer agitations and complaints sent to the Financial Stability Department.

In a related development, Mr Otabil also dispelled any notion that there was a “mistake “with the revocation of the license of one of the institutions that lost its license.

“This is also misinformation. The Bank of Ghana published details of the reasons for the revocation of the license of every institution. Whereas the dominant reason had been insolvency and the loss of franchise value of the affected institutions, there were other reasons too.

In a particular case, reference was made to a bank that was licensed based on false capital. Fortunately, it did not have that many deposits and therefore the Receiver did not fall on government resources to pay off their depositors. There was no mistake here and the misinformation must be corrected”, Mr Otabil stated.

“I assure the general public of the Bank of Ghana’s commitment to promoting the integrity and stability of the financial system”, Mr Otabil said.