The Bank of Ghana (BoG) has dismissed any possibility of reinstating the banking licence of GN Bank, which had earlier been reclassified as GN Savings and Loans Company Limited before its eventual licence revocation. In an interview with the Daily Graphic, BoG Governor Dr. Johnson Asiama emphasised that the issue has been conclusively resolved by the Supreme Court, leaving no scope for further regulatory or legal review.
“There is a Supreme Court ruling on that matter.
The review also failed. So, nothing can be done. We are, however, open to consider application for a new licence from anyone who is not connected to the directors or the defunct GN Savings and Loans Company Ltd,” the Governor said. The interview came in the wake of persistent news in recent times that the central bank had restored the licence of GN Bank. Context
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 sector.
Source: Elizabeth Nyaadu Adu
