The Bank of Ghana has taken a decisive step against fraudulent practices in the foreign exchange market by suspending the foreign exchange trading licenses of two prominent Nigerian-owned banks, Guaranty Trust Bank (GTB) and First Bank (FBN).
The suspension comes amidst a wave of regulatory crackdowns across West Africa, amid efforts by regulators to enforce guidelines and transparency in the financial sector.
The suspension, announced on Monday, is slated to take effect from March 18, 2024, for one month. The Bank of Ghana cited “fraudulent documentation” in the forex operations of the two banks as the primary reason for the suspension.
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According to the regulator, this action is in accordance with section 11(2) of the Foreign Exchange Act 2006, (Act 723). The Bank of Ghana emphasized the importance of adhering strictly to forex market regulations and guidelines, cautioning all market players against non-compliance.
“Bank of Ghana has suspended the Foreign Exchange Trading Licences of Guaranty Trust Bank Ghana Limited (GTB) and FBNBank Ghana Limited (FBN), effective 18th March 2024, for a period of one (1) month, in accordance with section 11 (2) of the Foreign Exchange Act 2006, (Act 723),” the statement partly read.
“This is a result of various breaches of the foreign exchange market regulations, including fraudulent documentation in their foreign exchange operations which have come to the attention of the Bank of Ghana.
“The license will be restored at the end of the one-month suspension period once the Bank of Ghana is satisfied that they have put in place effective controls to ensure strict adherence to the foreign exchange market regulations.”
This move underscores the regulator’s commitment to maintaining the integrity of the financial system and protecting the interests of investors and consumers alike.
The suspension of GTB and FBN’s forex licenses follows closely on the heels of the Central Bank of Nigeria’s (CBN) revocation of licenses for 4,173 Bureaux De Change Operators. The CBN attributed this action to widespread non-compliance with regulatory provisions, signaling a coordinated effort by regional authorities to crack down on illicit financial activities.
The suspension has reverberated throughout the financial markets, raising concerns about the stability and transparency of forex operations in Ghana.
In response, GTB (Ghana) Limited reassured customers that the suspension does not affect their deposits or other business segments. The bank affirmed its commitment to resolving the issues promptly and working closely with government agencies and stakeholders.
In a press release from its Corporate Communications Department, GTB Ghana reiterated its dedication to compliance and transparency, emphasizing that the suspension was not a result of willful non-compliance. The bank pledged to cooperate fully with regulatory authorities to address the concerns raised and uphold the highest standards of integrity in its operations.
GTB Ghana assured customers that all other products and services, including main branches, agency banking outlets, and digital banking platforms, remain fully operational. This assurance aims to mitigate any potential disruptions to customer service and maintain trust in the bank’s reliability and stability.
It stated, ‘’We refer to the Central Bank of Ghana’s press statement in which it announced the suspension of Guaranty Trust Bank Ghana’s Foreign Exchange Trading License effective from the 18th of March 2024 until 18th of April 2024 (1 month period) and received official notice of same.
“We would like to assure all our esteemed customers and stakeholders that we are currently working with the relevant Government Agencies and customers to resolve these trade-related issues timely.
“Our customers and stakeholders are our primary responsibility and, Guaranty Trust Bank Ghana would like to clarify that this development does not affect customers’ own deposits and other business segments of our operations. All other products and services, Main branches, and Agency Banking outlets are available for your convenient use at our regular opening hours and our Mobile Apps and Internet banking are available for your use at any time of the day.
“We further assure our customers that the issue was not a function of willful non-compliance by the Bank, as the Bank has a culture that endeavors to comply with regulations at all times and stringent Anti-Money Laundering CFT policies which are applied across all our operations.
“We are also in ongoing consultations and discussions with the Central Bank of Ghana to fully resolve all matters raised in the shortest possible time. Guaranty Trust Bank Ghana remains committed to being a constructive participant in Ghana’s financial markets and to contributing to its further developments in the interest of all its customers and stakeholders.’’