The Bank of Ghana, in June this year, made headlines after it announced that it will not honour an invitation from Parliament to assist with investigations into the revocation of the banking licences of Unibank and UT Bank.
Owners of the two banks had petitioned Parliament to probe the Bank of Ghana and the Ghana Stock Exchange on the revocation of the license of their respective financial institutions during the banking sector clean-up which commenced in 2017.
The two petitioners are Dr. Kwameba Duffuor, founder of now-defunct UniBank and Mr. Prince Kofi Amoabeng, the former Chief Executive Officer of now-collapsed UT Bank.
In their separate petitions, they asked Parliament to direct the Bank of Ghana to restore their banking licenses and “the remedying of the harms done to the shareholders’ property rights as a result of the conduct of the Bank of Ghana.”
Following the petition, the Speaker of Parliament directed the constitution of a seven-member parliament committee to look into the matter.
This committee is chaired by the First Deputy Speaker and Member of Parliament for Bekwai, Joseph Osei Owusu.
The remaining six are: Alexander Afenyo- Markin (MP, Effutu), Joe Ghartey (MP, Essikando-Ketan), Patrick Yaw Boamah (MP, Okaikwei Central), Samuel Atta-Akyea (MP, Abuakwa South), James Klutse Avedzi (MP, Ketu North), Hon. Cassiel Ato Forson (MP, Ajumako Enyan Esiam), Isaac Adongo (MP, Bolagtanga Central) and Elizabeth Ofosu-Adjare (MP, Techiman North).
Subsequently, the apex bank was invited to assist with investigation into the matter.
But the Central Bank, in responding through its lawyers, Bentsi-Enchill Letsa and Ankomah, said that the actions of the two former bank owners were contrary to some sections of the Bank of Ghana Act, 2002.
Regulation of the Banking Sector
There are two legislation that regulate banking and other related financial activities in the country.
2. Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) – the primary legislation for banking and other specialized deposit-taking business
The bank on Ghana, per its letter, referred to some provisions in two of out of the five Acts; Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Bank of Ghana Act, 2002 (Act 612)
It questioned the petitioners’ decision to use the legislative arm to resolve their grievances whilst the BSDTI Act had prescribed what should be done in cases of conflicts.
“The BSDTI Act provides how persons who are aggrieved with such decisions may seek redress for their grievances, and the prescribed resolution mechanisms do not include recourse to Parliament,” part of the statement from the apex bank reads.
Sections 140, 141, and 142 of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) prescribes the actions that one can take when it wants the apex bank to review a decision.
What does Section 140,141,142 of the BSDI 2016, Act 930 say
The Bank of Ghana also said that petitioners, in seeking to get parliament to influence its decision, were acting in contravention of Section 3(2) and section 4(1A) of the Bank of Ghana Act, 2002.
Section 3 and Section 4 of the Bank of Ghana Act, 2002, deals with the “objects of the Central Bank” and the “Functions of the Central Bank” respectively.
Perspectives On BOG’s Response to Parliament
The response from the Central Bank has triggered public discussion on whether or not the Central Bank was right in its decision.
Banking Consultant, Dr. Richmond Atuahene, in an interview on Accra-based Joy FM, asserted that the Bank of Ghana was right in its decision.
He said that it was also wrong on the part of Parliament to summon the central bank on a matter that was already before court.
Economist, Dr. John Gatsi does not agree with this.
He said in an interview with the Ghana New Agency that the Bank of Ghana was accountable to Ghanaians through parliament since it was set up and bound by the constitution.
Senior Vice President of IMANI Africa, a policy think-tank, Kofi Bentil, has also criticized the Bank of Ghana’s (BoG) refusal to submit to Parliament’s investigations into the circumstances leading to the revocation of the licenses of uniBank and UT Bank.
Can this be pursued in court?
Law lecturer at the University Of Ghana School Of Law, Mr. Kenneth N.O. Ghartey also helps with the question on whether the Bank of Ghana is justified in refusing to honour parliament’s invitation and if it can be pursued in court.
“As to whether parliament has power to invite the Bank of Ghana, from the nature of the constitutional creation of the Bank of Ghana, I do not see how the Bank of Ghana thinks that parliament cannot invite it to appear before a committee if it so requires. There are even other responsibilities under the constitution in which the Bank of Ghana is required to appear before parliament,” he told Dubawa Ghana.
“It’s a tricky matter. It has come up for the first time and the position is not clear as to what the law will really take but personally, there is nothing within the constitution that prevents parliament from calling upon the Bank of Ghana to answer questions on public interest,” he added.
Mr. Ghartey said that the Central Bank “is subject to the laws of Ghana and parliament has wide oversight responsibility over the arms of the executive including the Bank of Ghana which is effectively controlled by the executive”
When asked whether the matter could be pursued in court for clarity, he said that parliament should rather be the first point of call as they gave the Bank of Ghana their framework within which it should operate.
“I don’t know if it’s important that we go to the court to clarify this matter. Parliament itself in 2016 passed an amendment act, the Bank of Ghana (Amendment) 2016, Act 918, and within that amendment act, parliament says that except as provided by the constitution, the Bank of Ghana is not subject to the directive or control of anyone…so effectively, I don’t think that a court is needed to clarify this matter,” he said.
“It is parliament that gave the Bank of Ghana that power,” he insists.
“Within the constitution itself, it does not appear that Bank of Ghana has a broad constitutional independence but it is parliament that has given it that power so perhaps a court might then be able to weigh it out but for me, it seems to say that the only way to remove this position that Bank of Ghana has set for itself is for parliament to amend its own law and the power it gave to the Bank of Ghana,” he adds.
“The Bank of Ghana is provided constitutional responsibility under Article 183 to be “the Central Bank of Ghana” with responsibility to “issue the currency of Ghana,” Mr. Ghartey concluded.
Parliament, at the time of this report, had only acknowledged the receipt of the response from the Bank of Ghana and said that it will consider it.
The matter is indeed delicate. Bank of Ghana’s refusal to appear before a parliamentary committee to assist in investigations is based on legislation that regulates banking and other related financial activities in the country. While some may be unsatisfied with the Central Bank’s position, there may be a need for Parliament to amend these Acts that the Bank of Ghana is basing its stance on.
This report was produced under the Dubawa Student Fact-checking Project aimed at offering students in tertiary schools aspiring to take up roles in the profession the opportunity to acquire real-world experience through verification and fact-checking