Banks and SDIs Act is now under review to define BoG’s authority in bank resolution – Asiama
Dr. Johnson Asiama, Governor of the Bank of Ghana (BOG), has declared that the Banks and Specified Deposit-Taking Institutions (SDIs) Act, Act 930, is now under review.
He stated that this is to clarify the Bank of Ghana's role in bank resolution, reinforce the legislative foundation for financial stability, and promote an orderly and credible resolution process within the banking and credit sector.
'I must also emphasize that Act 930 is now being reviewed. Amendments are being proposed to clarify the Bank of Ghana's mandate in bank resolution, strengthen the legal framework for financial stability, and ensure an orderly and credible resolution regime within the banking and credit system," he said on Friday, October 10, while delivering the keynote address at the Office of the Registrar of Companies' sensitization programme for selected judges of the judiciary in Peduase, Aburi, in the Eastern Region.
Dr. Asiama went on to tell the judges that, unlike many adjudicative processes, insolvency proceedings in court are dynamic and must be completed on time to be successful.
Dr. Asiama stated that delays in the legal procedure might reduce the value of assets, jeopardize the company's sustainability, and have unforeseen negative repercussions for the insolvent estate and its stakeholders.
"It is, therefore, critical that the judiciary ensures timely hearings and prompt rulings to safeguard the integrity of the process."
He went on to clarify that, while insolvency rules give basic direction on how to implement insolvency processes and procedures effectively, they may not necessarily cover all conceivable cases.
As a result, he believes that judicial intervention is necessary to resolve legal ambiguities.
However, Dr Asiama stated that courts should exercise caution while exercising their authority in adjudicating bankruptcy and restructuring processes.
"This is because, in the absence of any findings of breaches of the rules of natural justice and due process, adverse court determinations against administrative decisions of the Regulator in insolvency proceedings have the tendency to create significant legal uncertainties, unwind contractual arrangements (including government interventions), reverse work done by receivers (e.g., asset sales to repay debts) and risk financial instability,"