Incidence of fraud, bane of rural banks- Apex Bank

Tikobo (W/R), June 23, GNA- Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank has cautioned the management of community and rural banks to be alert and strengthen their internal control mechanisms, by strictly enforcing security checks to minimise risks and incidence of fraud.

He said fraud continues to be the bane of Rural Banks and expressed his concern about the increase in such incidences involving syndicates who take advantage of non-adherence to laid down procedures and relaxed internal controls to facilitate their operations. These were contained in an addressed read on his behalf at the 12th annual general meeting of shareholders of the Jomoro rural bank at Tikobo Number One on Saturday.

Mr Osei-Bonsu urged officials of Rural and Community banks to ensure smooth coordination with the ARB Apex Bank so that the activities of the fraud syndicates would be effectively checked. The performance of the Jomoro Rural Banks for the year under review, according to the ARB Apex Bank composite rating, was satisfactory; however, he said there was room for improvement and urged them to take advantage of the opportunities within the bank's catchments area.

Mr Osei-Bonsu advised the Management of the bank to evolve strategies that would ensure the full recovery of microfinance loans to sustain the facility and improve profits.

He also called on existing shareholders and potential ones to buy more shares to ensure the steady growth of the bank. Mr James Leuven Mensah, Chairman of the Board of Directors of the banks, in a report said, the bank had to cope with many challenges during the year under review, including "stiff and fierce competition" from well established local and foreign-based banks, who adopt many tactics to infiltrate the area to poach customers. All these, coupled with the activities of a fraud syndicate that infiltrated the bank, resulting in the loss of revenue, "but in spite of these challenges, the bank performance was satisfactory". Mr Mensah disclosed that the bank lost about GH¢30,500 as a result of frauds, and that, three members of the syndicate who swindled the banks and were arrested in April 2007 are being prosecuted at the Sekondi High Court. The Jomoro Rural Bank made a net profit of 47.90 per cent from GH¢14,000 in the previous year to GH¢ 27,630 during the year under review.

Its investments rose from GH¢744,149 in 2006 to GH¢808,242 in 2007 and advanced loans to the tune of GH¢652,292 from GH¢512,872 in the previous year, an increase of 21.27 per cent. 23 June 08

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