In a landmark decision, the Accra High Court deemed the Bank of Ghana’s (BoG) actions against CDH Savings and Loans as “unfair and unreasonable,” citing the rushed demands placed on the company as procedurally unjust.
Justice Brew, presiding over the case, ruled that BoG’s two-week ultimatum for CDH to liquidate assets to address liquidity issues was overly stringent and did not provide the company adequate time to comply.
The decision highlighted BoG’s failure to follow a fair administrative process, as required under Article 23 of Ghana’s 1992 Constitution, which mandates fairness in administrative actions.
BoG initially revoked CDH’s license in August 2019, attributing the action to the company’s inability to fulfill depositor withdrawal requests due to liquidity problems.
CDH’s shareholders, CDH Financial Holdings Limited, contested the BoG’s move, arguing that the deadline imposed was unattainable and ultimately led to the revocation without reasonable consideration. In supporting CDH’s stance, the court emphasized the need for BoG to exercise fairness and due process when regulating financial institutions.
The court has now directed the dispute to be resolved through arbitration, encouraging BoG and CDH to reach a mutual agreement. This ruling underscores the importance of regulatory fairness, setting a precedent for the treatment of other financial institutions facing regulatory intervention in Ghana’s banking sector.