Bank Of Ghana Justifies The Revocation Of GN Bank's License

Bank Of Ghana Justifies The Revocation Of GN Bank's License

  • The Bank of Ghana says its revocation of GN Bank's license in 2019 is justified and has implied it will not restore it
  • It said GN Bank was insolvent at the time of its collapse and had breached several regulatory policies
  • It noted that calls for the restoration of the bank's license are untenable and would not be considered

The Bank of Ghana has revealed why it revoked GN Bank’s banking license in 2019.

In a memo responding to claims raised by the Global Chairman of Groupe Nduom, Papa Kwesi Nduom, the central bank, it was stated that the revocation of GN Bank’s license was justified.

Bank Of Ghana Justifies The Revocation Of GN Bank's License
The central bank says GN Bank was insolvent at the time of its collapse.
Source: Getty Images

It explained that the bank had been involved in several significant regulatory breaches that threatened its operational stability, making it a risk in Ghana’s financial sector.

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The BoG stated that calls for restoring GN Bank’s banking license are untenable and would not be considered under the circumstances.

The central bank referred to a statement it issued in August 2019 detailing the reasons for the bank’s license revocation, which included capital inadequacy, liquidity, governance, and risk management requirements.

It noted that GN Bank had consistently failed to meet the minimum capital requirements, raising concerns about its ability to absorb losses and protect depositors.

This was even though the central bank had assigned GN an adviser to assist it in downsizing its operations and raising the minimum capital required.

The central bank’s efforts did not yield much, as GN struggled with liquidity management, which affected its ability to meet customer withdrawal demands.

BoG also stated that deficits in GN Bank’s governance structure and risk management practices heightened its risk exposure and contributed to significant operational inefficiencies.

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It said GN Bank was insolvent and could not be allowed to continue operating within the country’s financial system.

Dr Nduom launches campaign to bring back his bank

The Global Chairman of Groupe Nduom, Dr Paa Kwesi Nduom, has begun a nationwide tour of defunct GN Bank offices as part of a campaign to resuscitate the bank.

The campaign, dubbed “BringBackGNBank,” will see Dr Nduom visit all 300 shutdown GN Bank branches across the country to inspect the state of facilities, engage with customers, and reveal to them his plans to restore the bank.

Dr Nduom rehashed his concern about the financial exclusion of his former customers following the bank’s collapse throughout his stops.

He noted that following the bank's exit in 2019 as part of the Banking Sector Cleanup, no other financial institution has entered the underserved financial markets to enable former customers to participate in the formal financial system.

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Dr Nduom emotional during bank tour

YEN.com.gh reported that Dr Nduom nearly broke down in tears after he visited one of the numerous branches of the defunct GN Bank.

When he toured the facilities, Dr Nduom could not believe the ruins he saw on his properties, which were worth millions of cedis.

He shared an emotional video to launch a campaign as part of a plan to get his bank in business again.

Source: YEN.com.gh

Authors:
Cornerlis Affre avatar

Cornerlis Affre (CA and Politics Editor) Cornerlis Kweku Affre is at present a Current Affairs Editor at Yen.com. He covers politics, business, and other current affairs. He has worked in various roles in the media space for at least 5 years. You can reach out to him at cornerlis.affre@yen.com.gh