(i) Five Duties Imposed by Law on the Holder of a Power of Attorney

In Ghanaian banking practice, a power of attorney (POA) creates an agency relationship governed by common law principles, the Powers of Attorney Act, 1998 (Act 549), and BoG directives on mandates and customer accounts. The attorney (donee) acts as an agent for the donor (principal), and breaches can lead to liability, as seen in cases where banks like Ecobank Ghana have faced disputes over unauthorized transactions by attorneys. Key duties include:

1. Duty to Act in the Best Interest of the Donor: The attorney must prioritize the donor’s interests, avoiding self-dealing. For example, if authorized to operate a bank account, they cannot use funds for personal gain. This fiduciary duty aligns with Section 4 of Act 549 and BoG’s Corporate Governance Directive 2018, which mandates ethical conduct to prevent conflicts, especially in financial conglomerates were banks act as agents.
2. Duty to Exercise Due Care and Skill: The attorney must perform tasks with reasonable diligence, akin to a prudent person. In banking, this means verifying transactions to avoid errors, such as overdrawing accounts. Practical insight: During the 2017-2019 banking cleanup, lapses in attorney diligence contributed to governance failures at banks like UT Bank, highlighting the need for compliance with Basel II/III operational risk standards adapted by BoG.
3. Duty to Avoid Conflicts of Interest: The attorney cannot place themselves in positions where personal interests conflict with the donors, without disclosure and consent. For instance, an attorney borrowing from the donor’s account for their business would breach this, as per common law (e.g., Spector v Ageda [1973] Ch 30) and BoG’s guidelines on agency in financial services, ensuring resilience in customer relationships.
4. Duty to Account and Provide Information: The attorney must keep accurate records and report actions to the donor upon request, including bank statements or transaction details. In Ghana, this supports AML compliance under the Anti-Money Laundering Act, 2008 (Act 749), as amended, and helps banks like Stanbic Bank Ghana monitor POA-operated accounts for suspicious activities post-DDEP recovery in 2023-2024.
5. Duty Not to Delegate Authority Without Permission: Unless specified, the attorney cannot sub-delegate powers (delegates non potest delegate). In practice, for bank operations, this prevents unauthorized third-party access, aligning with BoG’s Cyber and Information Security Directive 2020 to mitigate digital banking risks in fintech-integrated environments.

These duties ensure ethical practices, with banks often requiring POA registration and verification for BoG approval, promoting profitability through trust and reducing litigation risks.

(ii) Five Instances in Which a Power of Attorney Can Be Revoked

Revocation of a POA can occur expressly or by operation of law, as outlined in Act 549 and common law. Banks must monitor for revocation to avoid liability for honoring invalid mandates, as emphasized in BoG’s mandates guidelines. Examples from Ghanaian operations include automatic revocations during insolvency proceedings in the 2017-2019 cleanup.

1. Death of the Donor: Upon the donor’s death, the POA revokes automatically, as agency terminates with the principal’s demise. Banks like GCB Bank routinely require death certificates to freeze accounts, preventing post-death transactions and complying with inheritance laws under the Intestate Succession Act, 1985 (PNDCL 111).
2. Mental Incapacity of the Donor: If the donor becomes mentally incapacitated (e.g., insanity), the POA revokes unless it’s an enduring POA under Act 549. In practice, banks seek court orders or medical evidence, as in cases involving elderly customers amid rising digital banking adoption in 2025, ensuring ethical handling per BoG’s sustainable banking principles.
3. Bankruptcy or Insolvency of the Donor: Declaration of bankruptcy revokes the POA, as per the Insolvency Act, 2006 (Act 708) and Section 5 of Act 549. This was critical during the DDEP (2022-2024), where banks like Access Bank Ghana halted POA operations for insolvent clients to align with BoG recapitalization notices (e.g., BG/GOV/SEC/2023/05) and protect creditor interests.
4. Completion of the Specified Purpose: If the POA is for a specific act (e.g., a single bank transaction), it revokes upon fulfillment. Banks verify this in mandates, avoiding ongoing authority, which supports operational efficiency and compliance with the Payment Systems and Services Act, 2019 (Act 987) for outsourced or fintech-linked services.
5. Revocation by the Donor: The donor can expressly revoke via notice to the attorney and bank, effective upon communication. In Ghana, banks require written revocation and indemnities, as seen in international comparisons with Barclays, to prevent disputes and ensure account security under BoG’s Liquidity Risk Management Guidelines.

These instances integrate into modern banking by enabling swift account adjustments, enhancing resilience against risks like those in the Capital Bank collapse due to unrevoked mandates.