The High Court (Human Rights Division) has overturned the Bank of Ghana’s (BoG) decision to revoke the operating licence of Ideal Finance Limited, marking a significant legal victory for the defunct financial institution.
In a ruling delivered on Monday, March 10, the court found that the BoG had failed to follow the proper procedures required for the licence revocation.
The central bank had revoked Ideal Finance’s licence as part of its financial sector cleanup exercise, citing insolvency and poor governance structures. However, the court ruled that the revocation was unjustified, effectively restoring the company’s legal standing.
On August 16, 2019, the Bank of Ghana revoked the licenses of 23 insolvent savings and loans and finance house companies, including Ideal Finance, GN Savings and Loans, First Allied Savings and Loans, Midland Savings and Loans, and Unicredit Savings and Loans.
The Central bank justified its action by stating that these institutions remained insolvent despite being given ample time to recapitalize.
BoG’s financial sector cleanup was aimed at restoring confidence and stability within the banking system, but it also led to the collapse of numerous institutions, leaving depositors and stakeholders in financial distress.
