Implicated individuals in financial sector cleanup not fit to hold positions – BoG

The Bank of Ghana has reminded banks, Specialised Deposit-Taking Institutions, and the general public that individuals directly involved in the 2017-2019 Financial Sector Clean-up, as well as all previous directors of failed banks and Specialised Deposit-Taking Institutions since the passage of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), do not meet the fit and proper person criteria for key positions.

As a result, bank SDIs and the general public should take the preceding facts into consideration. 

In a notice to banks, SDIs, and the public, the Central Bank stated that in order to further advance the safety and soundness of Regulated Financial Institutions (RFIs), it has issued this notice to remind RFIs their obligation under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Fit and Proper Persons Directive, 2019 to ensure the continuous fitness and propriety of significant shareholders, and persons serving as directors and key managers.

The financial sector's regulator further echoed that poor corporate governance contributed significantly to excessive and imprudent risk-taking in the financial sector, resulting in the failure of some RFIs licensed by the BoG and necessitating the 2017-2019 banking sector clean-up.

"To sustain the gains made from the clean-up, the BoG issued the Corporate Governance Directive in 2018 as well as the Fit and Proper Persons Directive in 2019 to strengthen and embed sound corporate governance practices in RFIs and to entrench the gatekeeping role of the BoG in the financial sector”, it added.

To improve governance disclosure practices through RFIs, the BoG released the Corporate Governance Disclosure Directive in 2022 to communicate its regulatory expectations under Pillar III of the Basel Capital Accord, which addresses regulatory and public disclosures.

The Central Bank reaffirmed that Significant Stakeholders, Directors, and Key Management Personnel in their oversight and management roles must always be of good standing and have the necessary knowledge, skills, and experience to carry out their duties in accordance with the Fit and Proper Persons Directive, 2019. 

Among other things, the Fit and Proper Standards consider whether a person has been a director or directly involved in the management of any company or institution that: a. has had its license revoked; b. is being or has been wound up by a court of competent jurisdiction or other authority competent to do so within or outside Ghana; or c. has gone into receivership, insolvency, or involuntary liquidation.

Source : Florence Kyei/Lead News Online