The Court of Appeal has ordered the Bank of Ghana to restore the banking licence of GN Bank, reversing a lower-court ruling that had upheld the lender’s closure during the country’s sweeping financial-sector overhaul.

In a decision that could reverberate across Ghana’s banking industry, the three-judge panel also directed the central bank to return all assets seized from the institution and instructed the court-appointed receiver to hand management back to the bank’s former leadership.

The ruling marks the latest turn in a yearslong legal battle stemming from Ghana’s controversial banking-sector cleanup launched in 2018 under former central bank governor Ernest Addison.

GN Bank was downgraded to a savings-and-loans institution in January 2019 and renamed GN Savings and Loans Co. Ltd. Months later, the central bank revoked its licence, citing governance failures and financial instability, and appointed Eric Nana Nipah as receiver.

The bank’s owners, led by businessman Papa Kwesi Nduom, sued the central bank later that year, arguing the shutdown was unlawful and disproportionate.

In January 2024, the High Court sided with the Bank of Ghana, finding that GN Savings and Loans had failed to demonstrate solvency at the time its licence was revoked. Justice Gifty Addo Adjei ruled that the regulator acted within its constitutional mandate and dismissed claims that the institution had been unfairly targeted.

The appellate court’s reversal now reopens questions about the legality of some measures taken during Ghana’s banking reforms, which led to the collapse or consolidation of dozens of financial institutions.

Source:TheDotNews