After all the banks that have been merged, taken over or collapsed, Menzgold is the next institution that has obtained the full attention of the Bank of Ghana.
Though Menzgold has continuously maintained that it does not accept deposits, the Bank of Ghana keeps issuing warnings to Ghanaians and other members of the general public to stop transacting business with the self-described gold dealership company.
The most recent warning came yesterday when BoG said it was working with other state institutions to consider how to sanction Menzgold.
According to the Bank of Ghana, Menzgold’s activities contravene the Deposit-Taking Institutions Act, 2016 (Act 930).
Meanwhile, Menzgold also believes that its activities are perfectly legal under the laws of Ghana.
With the back and forth… we had a look at the supposed Deposit-Taking Institutions Act, 2016 (Act 930) the Bank of Ghana claims Menzgold’s activities contravene.
Deposit-Taking Institutions Act, 2016 (Act 930) says;
(1) Subject to this Act, a person shall not carry on a deposit-taking business in or from within the country unless that person is a body corporate formed under the laws of this country.
(2) A person that is not a body corporate formed under the laws of the country may, with the prior written approval of the Bank of Ghana, carry out a deposit-taking business in or from within the country.
(3) A person shall not propose to be a shareholder of a deposit-taking microfinance institution unless that person is a citizen
(4) The Bank of Ghana shall issue directives to govern the operations of persons exempted under subsection (2).
(5) For the purpose of this Act, deposit-taking business means the business of a) taking money on deposit and making loans or other advances of money; and (b) financial activities prescribed by the Bank of Ghana for purposes of this definition.
In effect, the 5(b) gives the Bank of Ghana the discretion to classify the operations of an entity whether it accepts deposits or not. Perhaps it is based on that the Bank of Ghana keeps sending warning notes to Menzgold after it has reviewed the its activities.
Maybe, Menzgold’s activities falls within BoG’s definition of Deposit taking.
If that’s the case…..erhm…we don’t want to be prejudicial here…
Let’s see who wins the fight.