The Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, has urged the judiciary to exercise caution and timeliness in adjudicating bank insolvency and resolution cases to prevent disruptions in Ghana’s financial system.
Delivering the keynote address at a judicial sensitisation programme on insolvency and beneficial ownership laws, Dr Asiama said delays and adverse rulings in insolvency proceedings could “create significant legal uncertainties and threaten financial stability”.
“Insolvency proceedings are dynamic and time-sensitive. Delays can lead to a diminution in asset values, jeopardise enterprise viability, and have unintended detrimental consequences,” he warned.
Citing recent legal developments, Dr Asiama referred to the Supreme Court’s 2023 ruling in Dr Papa Kwesi Nduom & Others v. Bank of Ghana & Others (GN Bank), which affirmed that the Human Rights Court has jurisdiction over bank resolution cases involving alleged breaches of administrative justice.
He described the ruling as an important reminder of the judiciary’s oversight role but cautioned against rulings that could “unwind contractual arrangements, reverse work done by receivers, or risk financial instability” unless clear breaches of due process are found.
“Courts should exercise circumspection in insolvency and restructuring proceedings. Judicial interventions must balance fairness with the need to preserve financial stability,” he said.
Dr Asiama referenced Principle 5.5 of the Financial Stability Board’s Key Attributes for Effective Resolution Regimes, which recommends that legal frameworks provide redress through compensation rather than reversal of regulatory actions taken in good faith.
He revealed that amendments to the Banks and Specialised Deposit-Taking Institutions Act (Act 930) are underway to clarify the central bank’s powers in resolving failing banks and to strengthen Ghana’s financial stability regime.
“With the support of all stakeholders, including the judiciary, we can build a credible insolvency and resolution system that benefits the economy,” he concluded.
The two-day program, hosted by the Office of the Registrar of Companies, forms part of ongoing efforts to equip judges with practical knowledge about insolvency and beneficial ownership legislation.
