Rural, Community banks asked to minimize incidents of fraud

Agona-Nkwanta (W/R), May 18, GNA - Boards and managements of Rural and Community Banks (RCBs) have been urged to strengthen their internal control mechanisms so as to minimize risks and incidents of fraud that have become the bane of these banks.

Mr Theophilus Obeng, Manager of the Association of Rural Banks (ARB) APEX Bank in Takoradi, also called for the evolvement of proper mechanisms that would ensure full recovery of microfinance loans to make the facility sustainable.

These were contained in a speech he delivered on behalf of Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank Limited at the 20th Annual General Meeting of shareholders of the Ahantaman Rural Bank at Agona-Nkwanta on Saturday.

Mr. Obeng said recent reported cases of fraudulent activities against Rural and Community banks, sometimes with the connivance of some workers, had become a source of grave concern to the ARB Apex Bank. "It is quite worrying to note that in some instances, the fraud syndicates took advantage of non-adherence to laid down procedures by staff of RCBs and the non-existence of or relaxed internal controls to facilitate their unfortunate activities".

Mr. Obeng said the elections of persons to serve as directors of these banks must be devoid of favouritism and nepotism, instead persons must have the experience, skills, competencies and the commitment to serve honestly and diligently.

The ARB Apex Bank, he said, would continue to provide assistance including capacity building through training of staff and management personnel of the RCBs to enable them to meet current challenges in the banking industry.

Mr. Obeng announced that the Millennium Challenge Account is providing financial assistance to boost on-going computerisation and networking of all RCBs and their agencies, and said the benefits from the project would be enormous. He commended the management and workers of the Ahantaman Rural Bank for their excellent performance that had made the Bank one of the best among 125 Rural Banks in the country.

Mr Joshua Ackah, the Bank's Board Chairman said it recorded profit before tax of GH¢588,487 in 2007, up from GH¢197,427 in 2006. Assets of the Bank increased by 40.5 per cent to GH¢8,163,402 from GH¢5,808,785 in 2006 while stated capital also increased by 84 per cent to GH¢278,747 from GH¢151,497.

Loans and advances to customers also increased by 111.6 per cent to GH¢4,131,512 from GH¢1,952,944 in 2006. Management recommended the payment of dividends of GH¢0.015 per share amounting to GH¢190,275. He said the Bank spent GH¢15,349.90 to support the activities of 21 communities, health and educational institutions and public organisations in its catchments area. 18 May 08