Revocation of GN Savings and Loans licence was based on sound judgment – BoG

The Director of Communications of the Bank of Ghana (BoG) has clarified that the BoG worked closely with GN Bank during its liquidity challenges.

According to him, the Central Bank also worked with GN Bank after its request to be reclassified as a Savings and Loans company.

He indicated that the revocation of GN Savings and Loans’ licence 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.

Adding “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ensure an orderly exit of the company and protect the sanctity of the banking sector, the company’s licence had to be withdrawn in accordance with the provisions of the Banks and Specilised Deposit-Taking Institutions, Act 2016 (Act 930)”.

Mr Otabil noted that the BoG has provided details on the various infractions that led to the revocation of the licence 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However, the licence of the Savings and Loans Company was revoked in August 2019 when the Bank of Ghana realised that the company still had liquidity challenges with customer agitations and complaints sent to the Financial Stability Department.