The Director of Communications of the Bank of Ghana, Bernard Otabil, has provided clarity on the revocation of GN Bank’s license. He emphasized that the decision was made to safeguard the stability of the banking sector.
According to Mr Otabil, the Bank of Ghana worked closely with GN Bank during its liquidity challenges and even after the company requested to be reclassified as a Savings and Loans company. However, when the company faced difficulties meeting depositor withdrawals, action had to be taken.
Media reports highlighted depositors’ agitation prior to the license revocation, further corroborating the need for intervention. Mr Otabil explained that complaints of the company’s inability to meet deposit demands were received by the Financial Stability Department, leading to the necessary withdrawal of its license.
GN Bank’s failure to meet the new minimum regulatory capital requirement by the specified deadline prompted their request for reclassification, which was granted. Nonetheless, ongoing liquidity challenges and customer agitations post-reclassification resulted in the license revocation in August 2019.
Dispelling claims of any mistakes in the license revocation process, Mr Otabil assured the public that the Bank of Ghana’s actions were well-founded. He stressed the importance of upholding the integrity and stability of the financial system.
“The Bank of Ghana published details of the reasons for the revocation of the license of every institution. Whereas the dominant reason had been insolvency and the loss of franchise value of the affected institutions, there were other reasons too,” Mr Otabil reiterated.
