GN Bank’s licence will not be restored – BoG

By
Makay
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BoG Governor

The Bank of Ghana (BoG) has announced that GN Bank’s banking licence will not be restored following its revocation in 2019.

According to Dr Johnson Asiama, Governor of the Bank of Ghana (BoG), the Supreme Court’s ruling on the matter leaves no legal avenue for automatic restoration.

He, however, added that any new application for a banking licence from unrelated parties may be considered under standard regulatory procedures.

Dr Johnson Asiama’s clarification comes amidst social media reports which claimed the Central Bank had restored GN Bank’s license.

The BoG Governor, in an interview, is quoted to have said, “There is a Supreme Court ruling on that matter. The review also failed. So, nothing can be done. We are, however, open to considering applications for a new license from anyone who is not connected to the directors of the defunct GN Savings and Loans Company Ltd”.

In 2024, the former BoG boss justified its decision to revoke the licence of GN Bank in 2019.

They insisted that the action was warranted by significant regulatory breaches, maintaining that GN Bank failed to comply with critical financial regulations and banking standards.

Background

GN Bank, which officially commenced operations in 1997 as First National Savings and Loans (FNSL) Company Limited, was upgraded to a universal bank on September 4, 2014.

It expanded rapidly across the country, establishing one of the largest branch networks in the banking sector.

The central bank, however, at the time argued that its regulatory assessments revealed that GN Bank’s expansion was not supported by adequate capital buffers and sound risk management practices.

BoG discovered that GN Bank regularly breached key prudential requirements, including capital adequacy and liquidity ratios.

Also, the BoG, 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.

Reports suggest that despite several directives and corrective measures issued by the BoG, comprising capital restoration plans and restrictions on certain banking activities, GN Bank was incapable of raising the required additional capital or restructuring its operations to restore solvency.

The bank was deemed severely undercapitalised and technically insolvent, prompting the BoG to ask the bank to downgrade to a savings and loans company, using the name GN Savings and Loans Company Ltd.

GN Bank’s license was then revoked in 2019 as part of the central bank’s efforts to protect depositors’ funds and stabilise the country’s financial sector.

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