The Bank of Ghana (BoG) made headlines on August 16, 2019, when it revoked CDH’s license due to liquidity issues. These issues arose from CDH’s inability to sell repossessed collateral, which in turn affected its ability to meet depositors’ withdrawal requests. CDH Financial Holdings Limited, the shareholders of CDH, challenged the revocation, claiming it was procedurally unfair. They sought arbitration to prevent any further disruptions to the bank’s operations.
Justice Brew, in his ruling, referred to Article 23 of Ghana’s 1992 Constitution, emphasizing the importance of fairness in administrative actions. This decision highlighted the need for transparency and due process in regulatory actions taken by the BoG.
Moving forward, it is crucial for financial institutions to adhere to regulations and maintain transparency in their operations to avoid facing similar challenges. Upholding the principles of fairness and due process is essential for building trust and confidence in the banking sector.
By reevaluating their internal processes and ensuring compliance with regulatory requirements, banks can mitigate risks and safeguard their reputation. The BoG’s decision serves as a reminder of the consequences that can arise from non-compliance and the importance of upholding regulatory standards in the financial industry.
