The Bank of Ghana (BoG), effective Friday, August 16, 2019, revoked the licences of 23 insolvent savings and loans companies and finance house companies as well as two non-bank financial institutions.
The Bank noted in a statement that the actions were taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Regulator to revoke the licence of a Bank or SDI, where the Bank of Ghana determines that the institution is insolvent.
The Regulator explained that the revocation has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.
“It is the Bank of Ghana’s assessment that these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors,” it noted.
The BoG has also appointed Mr. Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.
In line with the Government’s commitment to protect depositors’ funds, the Government has made funds available to enable the Receiver pay depositors after their claims are validated.
The Receiver is expected to make an announcement with regards to when and where payments will be made, indicating documents required from depositors to facilitate the validation of claims and orderly payment of validated deposits.
Other creditors of the failed institutions will be settled by the Receiver upon validation of their claims and to the extent that the Receiver is able to realize value from the remaining assets of these institutions.
These institutions are; Adom Savings and Loans Ltd., AllTime Finance Ltd., Alpha Capital Savings and Loans Ltd., ASN Financial Services Ltd., CDH Savings and Loans Ltd., Commerz Savings and Loans Ltd., Crest Finance House Ltd., Dream Finance Company Ltd., Express Savings and Loans Company Ltd., First African Savings & Loans Company Ltd., First Allied Savings and Loans Co. Ltd., First Ghana Savings and Loans Co. Ltd.
The rest are; FirstTrust Savings and Loans Ltd., Global Access Savings and Loans Company Ltd., GN Savings and Loans Ltd., Ideal Finance Ltd., IFS Financial Services Ltd., Legacy Capital Savings and Loans Ltd., Midland Savings and Loans Company Ltd., Sterling Financial Services Ltd., Unicredit Savings and Loans Ltd., and Women’s World Banking Savings and Loans Co. Ltd.
The BoG has also, revoked the licenses of two non-bank financial institutions, namely Express Funds International Ltd, a remittance company; and Ghana Leasing Company Ltd a leasing company which are insolvent and have been inactive for a number of years.
This action is pursuant to Section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates the Bank of Ghana to revoke the license of a non-bank financial institution licensed under that Act if that institution among other things ceases to carry on business.
The Regulator has notified the Registrar of Companies of the revocation of these two licenses and has requested that the Registrar commences winding-up proceedings against these companies under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180).
