Bank of Ghana lauds Rural Banks for remarkable performance

The Bank of Ghana (BOG) says rural and community banks have performed remarkably well over the past year, in spite of the country's turbulent economic situation.

Records available at the Bank indicate that as at the end of June this year, total deposits of rural banks stood at 181.09 billion cedis as compared to 107.86 billion cedis at the same time in 1999, Mr Daniel Owusu, a Manager at BOG, said at Jirapa in the Upper West Region on Saturday. The increase represents a 67.9 per cent. ($1 = ?6,300).

He was speaking at the annual general meeting of the Sonzole Rural Bank in the Upper West Region of Ghana.

Owusu said during the same period, advances by the rural banks surged from 52.25 billion cedis to 83.37 billion cedis, an increase of 59.6 per cent. The level of holding in Ghana government treasury bills by the rural banks also grew by 52.27 billion cedis from 52.9 billion cedis to 104.36 billion cedis under the same period.

This, he said, impacted positively on the network of rural blanks from 18.28 billion as at the end of June in 1999 to 29.53 billion cedis at the end of June 2000. Owusu noted with satisfaction the performance of the Sonzole Rural Bank, which has been without any of the serious problems that had caused the demise of some rural banks. "The Bank of Ghana is committed to ensuring the development and growth of efficient rural/ community banks as integral part of a vibrant banking system providing the bedrock for sustainable economic development".

Owusu announced that the proposed apex bank for rural banks to be set up by the BOG would be operational very soon. Among other functions it will offer specialised services to the rural banks, which will widen their scope of operation through general acceptability of cheques issued, appropriate training for both directors and staff and inspection of operations to strengthen internal control practices.

Mr Bede Ziedeng, Deputy Regional Minister, expressed regret that "the commercial banks have not covered a good portion of the three northern regions of the country, which have a large number of rural communities."

On the other hand, the association of Rural Banks has only eight rural banks in the three regions, a number woefully inadequate in meeting the banking needs of the area. He therefore appealed to the BOG and the association of rural banks to open more rural banks in there.

In his report, Mr. Sylvester Deri, Chairman of the Board of the Sonzole Rural Bank said despite the unfavourable economic conditions, the bank made a modest profit of 30.2 million cedis after taxation as against 36.6 million in 1998.