Rural Banks Advised to Improve Operations

Directors, shareholders and managers of rural and community banks (RCBs) in the country have been advised to adhere to prudential regulations of the Bank of Ghana (BoG) and the ARB Apex Bank to pre-empt regulatory sanctions.

Mr. Joseph Kofi Amoa-Awuah, Head of the Other Financial Institutions Supervision Department at the BoG who was speaking in Ho at the last in the series of the annual zonal Banking Operations Conference for directors and general managers of RCBs from the Greater Accra, Eastern and Volta regions, said it was not in the interest of the BoG to be penalising the RCBs for regulatory infractions.

 

He said the BoG and ARB Apex Bank have instituted a lot of prompt corrective actions aimed at ensuring that all the RCBs could continue to operate efficiently.

 

“Prompt remedial and corrective action instituted by the BoG, Apex Bank and the RCBs themselves can prevent the situation where RCBs would continue to ask for liquidity support from the ARB Apex Bank to shore up their operations,” he said.

 

Mr. Amoa-Awuah charged the RCBs to prepare for the introduction of the Ghana Deposit Protection Scheme, which is aimed at giving depositors of banks “some guaranteed minimum reprieve in the unlikely event of a rural bank being liquidated”.

 

He said he was happy that the meetings were organised on zonal basis, which allowed for greater interaction and participation between the RCBs and the two regulatory institutions.

 

Mr. Amoa-Awuah also encouraged directors and shareholders of RCBs, which have not yet met the mandatory minimum operating capital of GHC1 million set by the regulator to endeavour to meet the requirement before the end of 2018.

 

Mr. Kojo Mattah, Managing Director of the ARB Apex Bank, urged the RCBs to collaborate more and stop perceiving partner RCBs as their competitors adding, “the only direct competition we face is from the commercial banks and other non-bank financial institutions”.

 

He said he believes that, “we can succeed better through greater collaboration amongst ourselves” and charged the RCBs to endeavour to tap into the core banking platform introduced by the ARB Apex Bank to provide enhanced products and services to their customers.

 

He noted that the ARB Apex Bank had also introduced automated teller machines (ATMs) to the RCBs, adding that the Bank was in the position to assist RCBs to procure ATMs to help offer greater convenience to their valued customers.

 

He revealed that customers were becoming sophisticated and charged the RCBs to innovate in order to meet customer demands, noting that “we believe in deploying modern alternative banking channels to the delight of the RCB customers”.

 

Mr. Mattah said the ARB Apex Bank had supplied the needed equipment to many of the RCBs to help them issue ATM cards to their customers at their branches.

 

He indicated that the ARB Apex Bank was also coordinating the development of many products to suit the needs of the customers of RCBs.

 

Mr. Alex Awuah, Deputy Managing Director of the ARB Apex Bank tasked directors of the RCBs to take advantage of all the special initiatives being introduced by the regulators to improve upon their operations to enhance shareholder value.

 

Mr. Awuah also encouraged the banks to remain under the “umbrella” of the ARB Apex Bank to enjoy the economies of scale which come with operating within the family of rural banks with the largest number of bank branches in the country.

 

This year’s meetings organised by the ARB Apex Bank, were held in Kumasi for RCBs in Ashanti and Brong Ahafo, Tamale for RCBs in the three regions of the north, Agona Nkwanta for RCBs in Western and Central regions and Ho for RCBs in Greater Accra, Eastern and Volta regions.

 

The ARB Apex Bank is the “mini” central bank for the 141 rural and community banks operating in the country.