The Director of Communications at the Bank of Ghana (BoG) has clarified that the BoG collaborated closely with GN Bank during its liquidity issues. He noted that the Central Bank also worked with GN Bank following its request for reclassification as a Savings and Loans company.
He explained that the decision to revoke GN Savings and Loans’ license was made based on sound judgment to safeguard the integrity 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 stated.
He added, “Aside from the reported cases in the media, the Financial Stability Department of the Bank of Ghana received complaints about the company’s inability to pay deposits on demand. To ensure an orderly exit and protect the sanctity of the banking sector, the company’s license had to be withdrawn in accordance with the provisions of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930).”
Mr. Otabil also mentioned that the BoG has detailed the infractions that led to the revocation of GN Savings and Loans’ license.
Initially, GN Bank, unable to meet the new minimum regulatory capital requirement of GHS400 million by December 31, 2018, applied to the BoG for reclassification as a Savings and Loans company. This request was granted. However, by August 2019, the BoG revoked the Savings and Loans license after discovering continued liquidity problems and receiving numerous customer complaints and agitations reported to the Financial Stability Department.
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