BoG Reviewing Banks and SDIs Act to Strengthen Financial Stability Framework
The Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has disclosed that the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930), is currently under review to enhance the country’s financial stability framework.
According to Dr Asiama, the review seeks to clarify the central bank’s mandate in bank resolution, strengthen the legal basis for maintaining financial stability, and ensure an orderly and credible resolution regime within Ghana’s banking and credit system.
“I must also mention that Act 930 is currently under review. Amendments are being proposed to clarify the Bank of Ghana’s mandate in bank resolution, strengthen the legal framework for financial stability, and to ensure an orderly and credible resolution regime within the banking and credit system,” he stated.
Dr Asiama made these remarks while delivering the keynote address at a sensitisation programme organised by the Office of the Registrar of Companies (ORC) for selected members of the judiciary at Peduase, Aburi, in the Eastern Region, on Friday, October 10.
The BoG Governor noted that insolvency proceedings require timeliness to achieve maximum effectiveness, stressing that prolonged judicial processes could erode asset values and jeopardise enterprise viability.
“Insolvency proceedings in court, unlike many adjudicative processes, are dynamic and require timeliness to achieve utmost effectiveness. Delays in the judicial process can lead to a diminution in the value of assets, jeopardise enterprise viability, and have unintended detrimental consequences on the insolvent estate and stakeholders,” he cautioned.
He urged the judiciary to ensure prompt hearings and rulings to safeguard the integrity of the insolvency process.
Dr Asiama further explained that while existing laws provide broad guidance on insolvency and restructuring, they may not fully address all scenarios, making judicial interpretation crucial in resolving grey areas.
However, he cautioned that courts should exercise circumspection in reviewing administrative decisions taken by the Regulator in insolvency and restructuring cases.
“This is because, in the absence of any findings of breaches of the rules of natural justice and due process, adverse court determinations against administrative decisions of the Regulator in insolvency proceedings have the tendency to create significant legal uncertainties, unwind contractual arrangements — including government interventions — reverse work done by receivers, and risk financial instability,” Dr Asiama warned.
