The Court of Appeal has unanimously restored the operating licence of GN Savings and Loans Company Limited, overturning an earlier High Court decision that upheld the revocation of the company’s licence by the Bank of Ghana (BoG).

The ruling effectively quashes both the BoG’s 2019 decision to revoke the licence and the subsequent High Court judgment that validated the action. The appellate court further directed the receiver to hand over possession, management and control of the company’s assets and operations back to its shareholders.

Background

GN Savings and Loans was formerly known as GN Bank after evolving from First National Savings and Loans (FNSL). The institution became one of Ghana’s fastest-growing indigenous financial institutions, with an extensive branch network across the country.

However, during Ghana’s banking sector clean-up exercise initiated in 2018, the Bank of Ghana introduced stricter capital and regulatory requirements for financial institutions. GN Bank was unable to meet the new minimum capital requirement for universal banks and was subsequently downgraded to a savings and loans company on January 4, 2019, under the new name GN Savings and Loans Company Limited.

Seven months later, on August 16, 2019, the BoG revoked the company’s operating licence, citing insolvency, liquidity challenges, corporate governance breaches and violations of prudential regulations as part of the broader financial sector clean-up exercise. Eric Nana Nipah was appointed receiver.

The decision was challenged in court by Groupe Nduom, led by businessman Dr. Papa Kwesi Nduom, who argued that the revocation was unfair, unreasonable and failed to properly account for debts owed to the company by the government and its agencies.

In January 2024, the High Court ruled in favour of the Bank of Ghana, upholding the licence revocation. Dissatisfied with the judgment, the shareholders appealed the decision at the Court of Appeal.

The latest ruling by the Court of Appeal now marks a major legal victory for Groupe Nduom and reopens debate over Ghana’s controversial banking sector clean-up exercise.