• September 22, 2019

Licences of 23 financial institutions revoked by BoG

The Bank of Ghana has with effect from today, revoked the licences of twenty-three (23) insolvent savings and loans companies and finance house companies.

These actions were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.

The Bank of Ghana has also appointed Mr. Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.

The revocation of the licences of these institutions has become necessary because affected institutions are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope to see them recapitalized by their shareholders to return them to solvency.

In view of Bank of Ghana’s assessment, these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors.

In line with the Government’s commitment to protect depositors’ funds, the Government has made funds available to enable the Receiver pay depositors after their claims are validated. The Receiver will in due course make an announcement with regards to when and where payments will be made.

Subsequently, the receiver will indicate documents required from depositors to facilitate the validation of claims and orderly payment of validated deposits. Other creditors of the failed institutions will be settled by the Receiver upon validation of their claims and to the extent that the Receiver is able to realise value from the remaining assets of these institutions.

The Bank of Ghana has also with effect from today, revoked the licences of two non-bank financial institutions, namely Express Funds International Ltd (remittance company) and Ghana Leasing Company Ltd (leasing company) which are insolvent and have been inactive for a number of years.

This action is pursuant to Section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates the Bank of Ghana to revoke the licence of a non-bank financial institution licensed under that Act if that institution among other things ceases to carry on business.

The Bank of Ghana has notified the Registrar of Companies of the revocation of these two licences and has requested that the Registrar commences winding-up proceedings against these companies under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180).

Edward Kyei Frimpong-Mybeeponline

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