The High Court (Human Rights Division) has overturned the Bank of Ghana’s (BoG) decision to revoke the operating licence of Ideal Finance Limited, ruling that the central bank did not follow due process.
The ruling, delivered on Monday, March 10, marks a significant victory for the financial institution, which was among several companies affected by BoG’s financial sector cleanup.
According to the court, the Bank of Ghana failed to exhaust the necessary legal procedures before revoking Ideal Finance’s licence, making the decision unjustified. As a result, the company’s legal standing has been restored, paving the way for it to resume operations.
Ideal Finance was among 23 financial institutions whose licences were revoked on August 16, 2019, as part of BoG’s broader efforts to sanitise the banking and financial sector.
Other affected institutions included GN Savings and Loans, First Allied Savings and Loans, Midland Savings and Loans, and Unicredit Savings and Loans.
The central bank justified the move by citing insolvency and poor governance, arguing that these institutions had remained financially weak despite being given time to recapitalise.
While the financial sector cleanup was aimed at restoring stability and confidence in the industry, it led to the collapse of several institutions, causing financial distress for depositors and stakeholders. The exercise has also faced legal challenges from affected companies seeking to reverse the revocations.
The court’s ruling in favour of Ideal Finance sets a precedent for similar cases and raises concerns about the transparency and fairness of BoG’s regulatory decisions.
It remains to be seen whether the central bank will appeal the decision or review its approach to future financial sector interventions.
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