BoG sued over announcements to close down some Savings & Loans companies

BoG sued over announcements to close down some Savings & Loans companies

The central bank of Ghana has been sued by a private citizen for announcing it intends to close down distressed Savings and Loans companies.

Daniel Darko in an interview with Joy News said he is contesting the legitimacy of the BoG announcement. He has prayed the Human Right Division of an Accra High Court to direct the central bank to retract the statement.

The CEO of Ghatalia Limited opined that the BoG’s announcement has led to fear and panic withdraws.

BoG sued over announcements to close down some Savings & Loans companies
Ernest Addison, BoG governor. Source: Supplied
Source: UGC

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… predicting fear and panic within the Savings and Loans industry leading to bulk withdrawals by customers, a situation not only adversely affecting operations of the Savings and Loans in the financial sector which the Respondent superintends but also the applicant as well.

He also alleged that the decision by the BoG to close down these companies will affect a lot of business and individuals.

Daniel Darko is thus asking for a “declaration that the said pronouncement to close some Savings and Loans companies has affected his business, thereby affecting his right to life and to participate freely in his chosen economic activity.”

He is also seeking “an order restraining the Respondent from making such further pronouncements on the activities of Savings and Loans Companies until it has completed resourcing the Consolidated Bank in other to meet demands of depositors/customers of the defunct banks.”

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In august 2017, the Bank of Ghana revoked the licenses of UT bank and Capital Bank and merged it with the GCB Bank.

In August 2018, the central bank continued with the exercise by merging 5 banks namely Sovereign Bank, Beige Bank, Royal Bank, uniBank, and the Construction Bank into the Consolidated Bank Ghana Limited.

The banks were facing severe liquidity challenges and were also highly insolvent.

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