BY: Daniel Korang
I have always thought that Ghana is a country where the relationships of persons and institutions alike are governed by law. Contrariwise, it is unfortunate to learn that the country is plagued by so much illegalities that, one is left to wonder whether there are enforceable laws in Ghana. In this exercise I do not intend to give a lecture on banking, rather, I propose to present a lamentation on an unchecked anomaly in the banking sector.
Over the years, it has become commonplace for banks to declare their intention to publish, and oftentimes they do actually publish, the names and particulars of debtors who default in the repayment of loans and other facilities. Our dailies are replete with such threats from renowned banks and other financial institutions where ultimata are usually given for defaulting debtors to repay loans or face the embarrassment of having their names published in the newspapers. Is this practice legal under Ghanaian banking law? Is this practice acceptable in a civilised society like Ghana? This practice, in my opinion, is both illegal and commercially reprehensible, and must attract unanimous public aversion.
The Ghana Law on Banking
In Ghana, the business of banking is regulated by the Bank of Ghana Act, 2002 (Act 612), Banking Act, 2004 (Act 673) and the common law. At common law, a person becomes a customer of a bank when he opens an account with the bank or upon deposit of money with the bank: see Ladbroke & Co. v Todd(1914) 30 TLR 433. However, in Ghana, a person becomes a customer of a bank when the bank renders any of the services enumerated under section 11 of the Banking Act, 2004 (Act 673), which includes lending or giving of loans. The banker-customer relationship, like any other legal relationship, comes with a myriad of legal rights and obligations. The banker-customer relationship inter alia imposes upon the bank a duty of confidentiality in relation to information concerning its customer and his affairs which it acquires in its character as a bank. The bank?s duty of confidentiality covers all information gained by virtue of the banking relationship. It is not limited to information regarding the customer?s account. In the banker-customer relationship, the duty of secrecy is very important because the bank has very detailed knowledge of its customer?s financial affairs and all these details are acquired by the bank whilst it is managing the account of the customer.
The bank?s duty of secrecy in relation to customer information is not only contractual but also statutory in nature. Section 84 of the Banking Act, 2004 (Act 673) provides that:
?A director, an officer or any other employee of a bank shall not disclose an information relating to the affairs of a customer with that bank except where the disclosure of the information is required by law or by a court of competent jurisdiction or the Bank of Ghana or is authorised by the customer or is in the interests of that bank.?(Emphasis mine).
It follows therefore that, banks in the legal pursuit of their businesses must uphold the duty of confidentiality in respect of customer information. Where they fail in this duty, they may be liable civilly or criminally. In the case of Tournier v National Provincial and Union Bank of England  1 KB 461, where the defendant bank unlawfully called the customer?s employers and disclosed that the customer?s account was overdrawn and that he was suspected of being involved in gambling, the court held that the disclosure was unlawful and awarded damages against the bank. The court laid down four instances in which the bank may lawfully disclose confidential information about the customer as follows:
- Where disclosure is under compulsion of law: Thus a court may compel a bank or claimant in a legal action may seek disclosure against a bank in order to start proceedings against a third party, usually a bank?s customer. This was successfully done in the cases of Norwich Pharmacal Co. v Customs & Excise Commissioners  AC 133; Bankers Trust Co v Shapina  1 WLR 1274
- Where there is a duty to the public to disclose: The duty of confidentiality between a banker and a customer is overridden by the greater public interest, such as where a bank is aware that a customer is involved in money laundering, it must inform the police; see Pharaon v Bank of Credit and Commerce International SA (in liquidation)  4 All ER 455.
- Where the disclosure is made by the express or implied consent of the customer: A customer may consent expressly or impliedly to the disclosure of information on his/her account. The law is that when a customer opens an count or transacts business with a bank he does not give his implied consent for the bank to disclose any information to the public: see the case of Turner v Royal Bank of Scotland  2 All ER 664
- Where the interests of the bank require disclosure: Disclosure in the bank?s own interest is usually relevant where the bank sues to recover an unpaid loan advanced to its customer. This exception cannot be explored wrongfully or illegally, and this is where the banks get enmeshed in illegality.
The law does not permit a bank to embark on fanciful and rather whimsical disclosure of information about their customers. The disclosure is limited to situations where the bank has the need to disclose the customer?s information in court in an action brought to recover unpaid loans. Publication of a customer?s indebtedness in newspaper is not a known legal procedure for recovering loans from customers; it is a brazen violation of law and right of the customer. The practice whereby banks embark on publication of the names and details of their customers in newspapers as a means of demanding repayment of loan is not only wrongful, but it is also illegal. It is important to emphasise that loan agreements are contracts, in themselves, which are governed by the ordinary law of contracts. Therefore, upon default by a customer, the bank has a right to sue the customer for recovery of the unpaid loan. No bank has the right to publish the fact of the customer?s indebtedness in the newspaper as a means of facilitating recovery of the loan.
The point should be made that banks may attract liability when they publish information about their customers in newspapers where the publication does not fall within the exceptions enumerated above. In the first place, affected customers may bring civil action in defamation (i.e. libel) against the banks. Secondly, the banks and their offending officials may be prosecuted under sections 88 and 89 of the Banking Act, 2004 (Act 673).
Ghana is a country ruled by law. The banking sector is regulated by carefully drafted laws and regulations issued by the Bank of Ghana. The practice under discussion is both reprehensible and repugnant to acceptable banking practice. If we desire, as a country, to infuse some commercial morality and a high sense of transactional decency in the business of banking, then banks must observe the rule of law and stop charting illegal paths in their bid to recover unpaid loans. It is a matter of wonder whether banks which publish names of their defaulting debtors do seek legal advice before doing so. It is advised that, banks must adopt good lending policies and resort to lawful means to recover unpaid loans.
I must say in conclusion, that, Ghana is a country of rule of law and if we desire to live peaceably and undertake commercial activities in a manner devoid of illegalities, then all of us, including corporate bodies, should endeavour to abide by the law. Banks in Ghana must learn to do the right thing!
Ghana School of Law, Accra