A private citizen, Daniel Darko, has sued the Bank of Ghana, at an Accra High Court over what he describes as a breach of fundamental human rights in the case of the central bank’s announcements to close down Savings and Loans companies that are in serious financial distress.
Mr Darko is contesting the legitimacy of the BoG’s announcement seeking the Human Right Division of an Accra High Court to direct the central bank to retract the statement and blames it for the current challenges in the financial sector.
According to suit number HR/010/2019 the plaintiff who is also the CEO of Ghatalia Limited, a company incorporated under the laws of Ghana and dealing in import and export industry and doing business with savings and loans companies in the country.
The writ then accused the central bank of having published or caused to be published in the media that, “it is about to close down most Savings and Loans.”
This the plaintiff says has led to the “predicting fear and panic within the Savings and Loans industry leading to bulk withdrawals by customers, a situation not only adversely affecting operations of the Savings and Loans in the financial sector which the Respondents superintends but also the applicant as well.”
“That failure of the respondent to follow laid down procedures in carrying out its mandate of closing down such Savings and Loans if need be have such potential to affect applicants business including many other such businesses in the country,” the writ further stated.
Therefore in exercising his right, Daniel Darko is asking for a “declaration that the said pronouncements to close some Savings and Loans companies has affected his business, thereby affecting his right to life and to participate freely in his chosen economic activity.”
He is also seeking “an order restraining the Respondent from making such further pronouncements on the activities of Savings and Loans Companies until it has completed resourcing the Consolidated Bank in other to meet demands of depositors/customers of the defunct banks.”
Consolidated Bank Ghana
The newly-established Consolidated Bank Ghana (CBG) upon taking over the five banks blocked fixed deposit accounts of customers of the defunct Beige Bank.
This meant clients of the defunct bank could no longer make withdrawals from the fixed deposit accounts.
It will also be recalled that Bank of Ghana on August 1, 2018, granted a universal banking licence to Consolidated Bank Ghana Limited established by the government after revoking the licences of uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited and appointed Nii Amanor Dodoo of KPMG as the Receiver.
All deposits of the five banks it said at the time that were safe but had been transferred to the newly established Consolidated Bank.
This meant that customers could carry out their business as usual at their respective banks which became branches of the Consolidated Bank.
All staff of these banks also automatically became staff of the Consolidated Bank but Boards of Directors and shareholders of these banks no longer had any roles.
The central bank at the time stated that “Ghana needs a strong and stable banking sector to drive the process of economic transformation. A weak banking sector means that access to credit will be limited while lending rates will continue to be high.”