Grant us concessions in austerity programmes – RCBs urges government

Alex Kwasi Awuah, Managing Director of ARB Apex Bank, has appealed to the government to grant Rural and Community Banks (RCBs) some concessions during the implementation of major austerity programmes.

The rural banking sector, according to him, was facing serious challenges due to some measures taken by the government in recent times.

They include the increase in corporate tax income, which is now 25 per cent, up from a flat rate of eight percent.

The government’s domestic debt exchange programme had also had a severe impact on rural banks after they had barely recovered from the ravages of the dreaded COVID–19 pandemic and the headwinds of the ongoing Russian – Ukraine conflict.

Speaking to the Ghana News Agency in an interview in Kumasi, Mr Awuah said that RCBs had become leaders in the micro, small and medium scale financial delivery to entrepreneurs and businesses, especially those in the rural areas.

Rural and Community banks, he said, had been consistent in the past 40 years in partnering with the government in financial intermediation and rural financial inclusion policies.

Mr Awuah pointed out that, the life changing interventions had often been done by RCBS, whose shareholders happened to be farmers, petty traders and artisans.

They have sacrificed their comforts and invested their life savings to start these banks,

Mr Awuah stated that, if government could heed to their plea and reduce some of the austere measures, RCBs could speedup capital accumulation that would quickly restore the strong solvency position of banks which had been severely affected by some of these measures.

Additionally, it was important for the government to reconsider RCBs since they had devoted a substantial part of their annual recurrent budgets to support corporate social responsibility initiatives in the communities in which they operated.

Mr Awuah admitted that RCBs unarguably were a little behind the curve in the financial technology revolution in the country.

However, efforts were underway to leverage opportunities in the technology space to grow revenues and improve shareholder value for the banks.

He stressed the need for RCBS to embed Environmental, Social and Governance (ESG) risks principles in their operations, to help attract more shareholders and satisfy those who had already invested in the banks.