Bank of Ghana Headquarters
The Bank of Ghana has clarified that it performs its functions with humility and therefore wouldn’t target any institution under its regulatory purview with unreasonable expectations.
Additionally, as an independent institution, it mentioned that it was disrespectful for anyone to assume that it was influenced to take any regulatory action against any institution.
In an interview with TV3’s Paa Kwesi Asare last week, the Director of Communications, Mr. Bernard Otabil, explained that "it wasn’t in the Bank’s interest to target any institution for resolution but rather to provide all the regulatory support to ensure that any institution in a spot of bother is helped out of it."
The issuance of prompt corrective actions, he explained, is the first step to ensure that any financial institution falls back in line with regulatory norms.
Pressed on the issue of GN Bank/GN Savings and Loan, Mr. Otabil explained that GN Bank requested a reclassification, which the central bank obliged.
However, reclassification did not mean that all the issues that bedeviled GN Bank were resolved. It was still the responsibility of the reclassified institution to make good commitments under the institution before the reclassification.
According to the Bank, when the situation at GN Savings and Loans deteriorated, the central bank had no option but to resolve the institution, placing it under receivership.
However, the founder of GN Bank/GN Savings and Loans, Dr. Papa Kwesi Ndoum has been unhappy about the development as he has been in the news lately demanding answers from the Bank of Ghana.
"But it appears the answers were provided almost five years ago", Mr. Otabil emphasized.
In a release by BoG in August 2019, the Bank explained in detail how it came to its decision to resolve GN Savings and Loans. Among the numerous reasons offered was the fact that, although GN Bank had been reclassified, there was still no sign of improvement in its liquidity and solvency position.
Customers had been complaining to the Bank of Ghana about the institution’s lack of capacity to pay them their monies.
This, the central bank explained, threatened the stability of the financial system, and the institution had to be closed down.
GN Savings and Loans was one of the 23 institutions that were placed under receivership in the release of August 2019 by the central bank.
The central bank also signaled in that release that it had brought an end to the banking sector clean-up exercise that started in 2017.
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