Money-laundering threatening economy

The Bank of Ghana (BoG) has stated that money laundering and terrorist financing have become herculean challenges in the country’s economy, particularly in the banking sector.

The Assistant Director at the Supervision Department of the BoG, Mr Daniel Ohene Kweku Owusu, made the observation at the launch of the 30th anniversary of the Lower Pra Rural Bank at Shama last Saturday.

He said rural and community banks might be attractive to perpetrators of money laundering and terrorist financing because of the perceived relatively weak internal control systems.

To curb those negative trends in the banking sector, he said, the BoG and the Financial Intelligence Centre had issued guidelines to assist licensed financial institutions in designing and implementing their respective Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) compliance programmes.

That, he said, was to ensure an improved monitoring surveillance regime to help minimise, detect and respond effectively to the threat of money laundering and terrorist financing.

He said it was, therefore, imperative for all relevant institutions, including rural and community banks, to strictly implement the guidelines to effectively combat money laundering and terrorist financing.

Mr Owusu urged the management, board and staff of the Lower Pra Rural Bank to place a high premium on good corporate governance and risk management.

He noted that the computerisation drive embarked upon by rural and community banks had impacted positively on their competitiveness, adding that to minimise the risk introduced by computerisation, rural banks should put in place appropriate Information and Communications Technology (ICT) security policies, as well as adequate disaster recovery plans, to protect the assets of the banks.

He said the 139 rural banks in the country had revolutionised many micro and small-scale businesses, provided credit, vital financial intermediation and other quality banking services which had sustained and helped businesses to expand.

Mr Owusu said the Lower Pra Rural Bank had, for the past 30 years, played its part in the economy of its catchment area.

He said it was worthy of note that the bank’s paid-up capital stood at GH¢1.39 million as of June 2013, an amount which far exceeded the statutory minimum capital base requirement currently pegged at GH¢300,000 for rural banks.

He said the solid capital base of the bank provided a source of strength to meaningfully manage risks and reasonably stay solvent, since it provided adequate cushion for unanticipated risks.

“In addition to the capital base attained, the bank’s mobilised deposits stood at GH¢40.21 million, an increase of 7.92 per cent, while credit granted amounted to GH¢23.68 million, inching up by 24.83 per cent for the first half of the year,” Mr Owusu revealed.

The Chairman of the Board of Directors of the bank, Mr Nathaniel Arthur, said the Lower Pra Rural Bank was established on August 13, 1983 and had chalked up great successes with its 13 agencies and three mobilisation centres.