“Otabil: GN Savings & Loans breached Foreign Exchange Act”

The Bank of Ghana’s Director of Communications, Bernard Otabil, has refuted claims by Dr. Papa Kwasi Nduom, Chairman of Group Nduom, that the central bank was influenced by former Finance Minister Ken Ofori-Atta to collapse GN Savings and Loans.

Otabil stated that GN Savings and Loans violated financial regulations, including the Foreign Exchange Act of 2006 (Act 723). He emphasized that the central bank does not arbitrarily close institutions, but rather takes action based on how they are run and their respect for prudential norms.

Otabil accused GN Bank and GN Savings and Loans of being disrespectful to the central bank, citing a transfer of dollars, pounds, and euros to International Business Solutions, an affiliated institution outside Ghana, in breach of the Foreign Exchange Act.

The Bank of Ghana revoked the licenses of 23 savings and loans companies and finance houses in 2019, including GN Bank.

GN Bank subsequently sought legal action challenging the revocation, but an Accra High Court upheld the central bank’s decision in January, citing governance deficiencies that rendered GN Savings and Loans unable to meet its debt obligations.

Dr. Nduom claimed that Mr. Ofori-Atta petitioned Cabinet to facilitate the collapse of GN Bank to prevent political interference. However, Otabil maintained that the central bank’s decision was based on regulatory requirements, not political influence.

The Bank of Ghana’s statement of August 16, 2019, detailed the reasons for the revocation of GN Savings and Loans’ license, which the central bank stands by. Dr. Nduom’s claims of political interference have been dismissed by the Bank of Ghana, which emphasizes its commitment to upholding regulatory standards.