Bank of Ghana (BoG) has defended its decision to revoke the license of GN Savings and Loans.
This follows allegations by Dr. Nduom, who attributed the collapse of his banks to the influence of former Finance Minister Ken Ofori-Atta in shutting down GN Savings and Loans.
Director of Communications at the BoG, Bernard Otabil, provided the rationale for this move, countering allegations made by Dr. Papa Kwasi Nduom, Chairman of Group Nduom.
Mr. Otabil clarified that the revocation was due to GN Savings and Loans’ violations of financial regulations, including the Foreign Exchange Act of 2006 (Act 723).
Foreign Exchange Act of 2006 (Act 723) provides a legal framework for regulating foreign exchange transactions in Ghana, ensuring that such activities are conducted in an orderly and lawful manner.
The Act empowers the Bank of Ghana to oversee these transactions, enforce compliance, and implement measures to protect the country’s foreign exchange reserves and economic stability.
“At the end of the day, it is not in the interest of the central bank or we don’t go out there and say this institution must actually be closed down at all cost.
In fact, let me make it clear that the GN Bank and GN Savings and Loans were actually disrespectful to the central bank” he noted.
Citing instances of some unlawful transactions done by GN Bank sometime before it’s was collapsed, the BoG Communications Director contended that BoG still stands by its statement issued in August 2019 which declared GN Bank insolvent and among other the need for its collapse.
“For instance, if you go through the books you will see that there was a transfer of dollars, and pounds and Euros to International Business Solutions which is an institution affiliated to the group network based outside which was in direct breach of the Foreign Exchange Act of 2006 (Act 723).
These provisions are there. Our statement of August 16 2019, we stand by that statement and in that statement, we have given all the reasons behind the revocation of the license of GN Savings and loans,” he told TV3’s Paa Kwasi Asare.
In 2019, the Bank of Ghana revoked the licenses of 23 savings and loans companies, including GN Bank. The bank subsequently sought legal action challenging the revocation of GN Savings and Loans’ license by the Bank of Ghana.
However, in January of this year, an Accra High Court, presided over by Justice Gifty Addo Adjei, upheld the legality of the Central Bank’s decision.
The court emphasized the institution’s right to revoke the license due to governance deficiencies that rendered GN Savings and Loans unable to meet its debt obligations.
Dr. Nduom claimed that Mr. Ofori-Atta petitioned the Cabinet to facilitate the collapse of GN Bank to prevent any political interference.
“I have with me here a memorandum submitted by the Minister of Finance at that time, Mr. Ken Ofori-Atta, asking Cabinet to agree for GN Bank to be collapsed, for its license to be taken. This memorandum didn’t consider that this bank was the biggest bank with the widest distribution in Ghana.
“It didn’t recognize that we were providing banking services that increased financial inclusion in Ghana. It didn’t recognize that we were supporting financial development and economic development in Ghana.
“It just said, these people are causing us problems and therefore it might affect our political chances, so let’s shut it down,” Dr. Paa Kwesi Nduom claimed in a viral video shared on X formerly Twitter.
He acknowledged that, although the memorandum was presented to the cabinet, the cabinet did not consent to Ken Ofori-Atta‘s request to revoke the bank’s operating license.