Persons implicated in banking sector clean-up cannot hold positions in banks, SDIs – BoG

The Bank of Ghana (BoG) says persons who were directly implicated in the 2017–2019 financial sector clean-up, and all previous directors of failed banks are barred from holding key positions under the fit and proper person criteria.

According to the BoG, the move is to entrench the gatekeeping role of the Central Bank in the financial sector.

“Poor Corporate Governance contributed significantly to excessive and imprudent risk-taking in the financial sector, which led to the failure of some Regulated Financial Institutions (RFIs) licensed by the Bank of Ghana (BoG), consequently necessitating the 2017-2019 banking sector clean-up.

“In order 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”, a notice signed by BoG’s secretary, Sandra Thompson stated.

“The BOG reminds the public that persons who have been directly implicated in the 2017-2019 Financial Sector clean-up, and all previous directors of failed banks and SDIs since the enactment of Banks and Specialized Deposit-Taking Institution Act, 2016 (Act 930) do not qualify to hold key positions under the fit and proper persons criteria,” it continued.

The banking sector clean-up exercise took place from mid-2017 to January 2020. It resulted in a reduction in the number of banks from 34 to 23, while 347 microfinance institutions, 15 savings and loans, and eight finance houses had their licenses revoked for various breaches, according to the Central Bank.