The Use of Word bank

In Today’s Friday Read, we will look at the restriction on the use of the word “bank” in the Bank and Specialized Deposit Taking Institution Act, 2016 (the “Act”).
The Act provides that only a company holding a banking license may hold itself out as a bank or use the word “bank” or any of its derivatives in any language, or any word that sounds like “bank” in the description or title under which that company or person carries on its financial services business in Ghana.
Thus, financial institutions or specialized deposit taking institution such as Savings and Loans, Microfinance, Credit Unions, Brokerage firms are prohibited under the Act to use the word “bank” or any of its derivative or make a representation to that effect in any of its letters, papers, notices, advertisement or in any other manner.
A specialized deposit-taking institution shall in all correspondence, publications and advertisement, use the full name of that specialized deposit-taking institution as stated on the license issued by the Bank of Ghana.
It is interesting to note that the use of the word “bank” in the name of an association of banks or of employees of a bank formed for the promotion of mutual interests of its members is not be construed as a contravening the probation on the use the word “bank”.
Further to the above, it is to be noted that a specialized deposit-taking institution that is licensed as a rural or community bank may use the term “rural bank” or “community bank”.
The Bank of Ghana (“BOG”) may prescribe similar restrictions on the use of terminologies related to other classes of specialized deposit-taking institutions.
A person who contravenes this section is liable to pay to an administrative penalty of Eighteen Thousand Ghana Cedis (GHS 18,000.00) and shall be ordered by BOG to cease using the terminology, phrase or word that contravenes the above stated prohibition.