Skip to main content

BoG has not restored GN Bank licence - Governor [UPDATED]

 


The Bank of Ghana (BoG) has not restored the banking licence of GN Bank, which was downgraded to GN Savings and Loans Company Limited before its licence was revoked.

The Governor of the BoG, Dr Johnson Asiama explained this to the Daily Graphic in an interview in the wake of persistent news in recent times that the central bank had restored the licence of GN Bank.


Context

GN Savings and Loans is currently challenging the revocation of its license and the case is still pending in court. A decision from the court is expected soon.


The revocation of the licence in 2019, according to the regulator, was final and taken in the interest of safeguarding depositors and ensuring the stability of the financial sector.

The central bank, in an earlier interview in 2024, justified its decision to revoke the licence of GN Bank in 2019, insisting that the action was warranted by significant regulatory breaches.

The BoG at the time maintained that GN Bank failed to comply with critical financial regulations and banking standards, which threatened its operational stability.


In a statement issued in August 2019 detailing reasons for the revocation, the central bank said GN Bank fell short of capital adequacy, liquidity and governance and risk management requirements.


Background

GN Bank, which commenced operations in 1997 as First National Savings and Loans (FNSL) Company Limited before being upgraded to a universal bank on September 4, 2014, expanded rapidly across the country, establishing one of the largest branch networks in the banking sector.

However, the central bank at the time said its regulatory assessments revealed that the bank’s expansion was not supported by adequate capital buffers and sound risk management practices.

The BoG found that GN Bank consistently breached key prudential requirements, including capital adequacy and liquidity ratios.


Further investigations, the BoG said in its statement, showed high levels of non-performing loans (NPLs), significant exposure to related-party transactions, and poor corporate governance structures, which weakened the bank’s financial position over time.



It said in spite of several directives and corrective measures issued by the central bank, including capital restoration plans and restrictions on certain banking activities, GN Bank was unable to raise the required additional capital or restructure its operations to restore solvency.


By the time of the sector-wide reforms, the bank was deemed severely undercapitalised and technically insolvent, prompting the BoG to ask the bank to downgrade its categorisation back to a savings and loans company, trading under the name GN Savings and Loans Company Ltd.



Shortly after, the central bank revoked its licence, saying it was part of measures to prevent a broader threat to financial stability.


The collapse of GN Bank/GN Savings and Loans Company Ltd formed part of the banking sector clean-up exercise, which saw the revocation of licences of several banks, savings and loans companies and microfinance institutions to address systemic weaknesses in the financial 




Comments

Post a Comment

Popular posts from this blog

DCE Distributes Farming Tools to Boost Agriculture in Twifo Atti Morkwa

 DCE Distributes Farming Tools to Boost Agriculture in Twifo Atti Morkwa The District Chief Executive (DCE) and Member of Parliament of Twifo Atti Morkwa, on behalf of His Excellency John Dramani Mahama, distributed farming tools, including boats and fertilizers, to local farmers. This initiative aims to enhance agricultural productivity and improve the livelihoods of farmers in the district. The DCE's efforts demonstrate the government's commitment to supporting the agricultural sector and promoting economic growth in the region.  He further added at the items giving to the farmers will be monitored by the agriculture director to make sure they are using it. Anyone who will cought by selling his or her tools will be handed over to the police custody  Farmers expressed gratitude to the President and the DCE for the timely intervention, which they believe will significantly impact their farming activities. This initiative is a testament to the government's efforts to promo...
Post a Comment
Read more

Don't Wait for National Sanitation Day to Clean Your Compound" - DCE Urges Assembly Members

  *"Don't Wait for National Sanitation Day to Clean Your Compound" - DCE Urges Assembly Members* Today marks National Sanitation Day across Ghana, an initiative by President John Dramani Mahama. The Twifu Atti-Morkwa District Assembly, led by Hon. Isaac Kofi Yawson, organized a clean-up exercise at Twifu Mampong, the center of Mampong Area Council. Chiefs, pastors, opinion leaders, and officials from the Assembly participated in the event. During the exercise, residents of Twifu Mampong came out in large numbers to clear principal streets and gutters. Hon. Yawson expressed gratitude to participants for their overwhelming support and acknowledged the importance of putting aside political differences to focus on development. The DCE urged assembly members not to wait for National Sanitation Day to clean their compounds, emphasizing that cleanliness should be a daily routine to combat malaria and other diseases. "Clean-up exercises must be our daily routine, which can h...
Post a Comment
Read more

ECOLINKS Supports Twifu Atti-Morkwa District with 1000 Coalpots*

  *ECOLINKS Supports Twifu Atti-Morkwa District with 1000 Coalpots* The District Chief Executive for Twifu Atti-Morkwa District, Hon. Isaac K. Yawson, has revealed that the foreign-based Non-Governmental Organization, ECOLINKS, has donated 1000 gyapa coalpots to residents of five communities in the district. The communities benefiting from the initiative are Akweikrom, Akloman, Akutuase, Asamoakrom/Ongwaso, and Bimpongegya, with each community receiving 200 coalpots. According to Hon. Yawson, the primary objective of this program is to help mitigate climate change in the district, region, and country as a whole. He attributed the adverse effects of climate change to human activities such as cutting down trees for firewood. Hon. Yawson expressed gratitude to ECOLINKS for their continued support, noting that this is not the first time the organization has made such a donation to the district. He credited his lobbying efforts for the successful acquisition of the coalpots. The Assembl...
Post a Comment
Read more