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The Bank of Ghana (BOG) has defended its 2019 decision to revoke GN Bank’s license, asserting that the move was justified due to significant regulatory breaches.
The Central Bank maintains that GN Bank failed to adhere to essential financial regulations and banking standards, jeopardizing its operational stability. Consequently, the Bank of Ghana has indicated that it cannot reinstate GN Bank’s license as requested by the bank’s management.
In a statement from August 2019, the Central Bank detailed the reasons for the revocation, highlighting GN Bank’s deficiencies in capital adequacy, liquidity, governance, and risk management. GN Bank consistently failed to meet minimum capital requirements, raising concerns about its capacity to absorb losses and protect depositors. Additionally, the bank’s liquidity management issues hindered its ability to meet customer withdrawal demands.
GN Bank also faced shortcomings in its governance structure and risk management practices, leading to operational inefficiencies and increased risk exposure. For example, the bank suspended operations in 70 branches, including the Head Office branch at Asylum Down and Castle Road branch, and temporarily suspended its entire management team without BOG’s approval. This action, taken mainly due to insolvency and liquidity challenges, violated section 25 (2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
As a result, the BOG revoked GN Bank’s license to safeguard the financial system and protect depositors.
Source:Omanghana.com
