Persons implicated in financial sector cleanup unfit for key positions – Bank of Ghana

The Bank of Ghana(BoG) has reminded all financial institutions to abide by the Banks and Specialised Deposit-Taking Institutions Act, 2016, and the Fit and Proper Persons Criteria.

Under the laws, persons directly implicated in the 2017–2019 financial sector clean-up and all previous directors of failed banks are barred from holding key positions in the financial sector.

As such, banks’ Specialised Deposit-Taking Institutions (SDIs) and the general public must note the above for their information.

In a notice signed by BoG’s secretary, Sandra Thompson, to banks, SDIs and the public, the central bank said their obligation under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Fit and Proper Persons Directive 2019, is to ensure the continuous fitness and propriety of significant shareholders, and persons, serving as directors and key management personnel of RFIs.

The regulator had reminded all and sundry that poor Corporate Governance contributed significantly to excessive and imprudent risk-taking in the financial sector, which led to the failure of some RFIs licensed by the BoG, consequently necessitating the 2017-2019 banking sector clean-up.

“To sustain the gains made from the clean-up, the BoG issued the Corporate Governance Directive in 2018 as well as the Fit and Proper Persons Directive in 2019 to strengthen and embed sound corporate governance practices in RFIs and to entrench the gatekeeping role of the BoG in the financial sector”, it added.

To enhance governance disclosure practices by RFIs, the BoG further issued the Corporate Governance Disclosure Directive in 2022 to convey its regulatory expectations under Pillar III of the Basel Capital Accord relating to regulatory and public disclosures.

“For clarity, those under the ban include persons who worked with a financial company “which had its licence revoked, is being or has been wound up by a court of competent jurisdiction or other authority competent to do so within or outside Ghana, or has gone into receivership, insolvency or involuntary liquidation.”

The Central Bank recapped that Significant Stakeholders, Directors and Key Management Personnel in their oversight and management functions shall at all times be of good repute and possess sufficient knowledge, skills and experience to perform their duties in line with the dictates of the Fit and Proper Persons Directive, 2019.

Among others, the Fit and Proper Standards consider whether a person has been a director of, or directly involved in the management of, any company or institution:

a. which had its licence revoked

b. or is being or has been wound up by a court of competent jurisdiction or other authority competent to do so within or outside Ghana

c. has gone into receivership, insolvency or involuntary liquidation