The Court of Appeal has restored the operating licence of GN Savings and Loans in a ruling that could have significant implications for Ghana’s financial sector and the ongoing debate over the banking sector clean-up exercise.
The decision overturns an earlier action that led to the revocation of the company’s licence during the financial sector reforms initiated by the central bank.
The reforms, introduced to strengthen the country’s financial system, affected several banks and savings institutions that were deemed insolvent or unable to meet regulatory requirements.
The ruling comes after a three-member panel of the second-highest court quashed the High Court’s decision, which upheld the license revocation on the grounds that it was unfair and unreasonable.
By the judgment, both the decision to revoke the licence and the High Court decision to uphold the same have been quashed.
The court ordered that the receiver should also hand over possession, management, and control of the assets and other activities to the shareholders of the company.
GN Bank was downgraded to a savings and loans company by the Bank of Ghana (BoG) in 2019, following the bank’s inability to meet the BoG’s minimum capital of GH¢400 million by December 31, 2018, leading to the revocation of its licence by the BoG.
Seven months later, on August 16, 2019, the BoG, then under the leadership of Dr Ernest Addison, revoked the operating licence of GN Savings and Loans Company Limited and appointed Eric Nana Nipah as Receiver as part of the banking sector clean-up exercise.
The same month, Groupe Nduom, owners of GN Savings and Loans Company Limited, led by Dr Papa Kwesi Nduom, challenged the revocation of the licence in the High Court in Accra.
On January 24, 2024, Justice Addo upheld the revocation of the licence.
