The Director of Communications of the Bank of Ghana, Mr. Bernard Otabil, has clarified the Bank’s actions regarding GN Bank during its liquidity challenges and subsequent reclassification to a Savings and Loans company. He emphasized that the revocation of GN Bank’s license was a well-considered decision aimed at maintaining the integrity of the banking sector.
“We took our time with the GN Bank case. When depositors across the country began expressing concerns because the Savings and Loans company couldn’t fulfill withdrawal requests, it was time to act,” Mr. Otabil explained.
He highlighted that media reports had already indicated depositor agitation before the license revocation. “Aside from media reports, the Financial Stability Department of the Bank of Ghana received numerous complaints about the company’s inability to pay deposits on demand. To ensure an orderly exit and protect the banking sector’s sanctity, we had to withdraw the company’s license under the Banks and Specialized Deposit-Taking Institutions Act 2016 (Act 930).”
Mr. Otabil elaborated on the infractions that led to the license revocation. GN Bank was unable to meet the new minimum regulatory capital requirement of GHS 400 million by December 31, 2018, and had requested reclassification as a Savings and Loans company, which the Bank of Ghana granted. However, the license was revoked in August 2019 due to persistent liquidity issues and customer complaints.
In addressing rumors of a mistake in revoking another institution’s license, Mr. Otabil stated, “This is misinformation. The Bank of Ghana provided detailed reasons for each license revocation. While insolvency and loss of franchise value were common reasons, other issues were also considered. For example, one bank was licensed based on false capital. Fortunately, it had few deposits, so government resources were not required to pay off depositors. There was no mistake, and this misinformation must be corrected.”
Mr. Otabil assured the public of the Bank of Ghana’s dedication to promoting the financial system’s integrity and stability.
