Official says BOG would sanction rural banks that break the law

Worawora (V/R), July 15, GNA - Mr Amadu Montia, Chief Manager, Banking Supervision Division of the Bank of Ghana (BOG), has warned that the Bank would not hesitate to apply sanctions against rural banks that go contrary to the rules and regulations of the Central Bank. Addressing the third shareholders meeting of the Asubonten Rural Bank at Worawora at the weekend, Mr Montia deplored the attitude of some directors of rural banks, who turned themselves into executive directors and drew salaries from the banks.

Others take allowances other than those approved by shareholders and engage in unnecessary interference in the day-to-day activities of the banks.

''The Bank of Ghana is committed to enforcing rules and regulations aimed at instilling sanity into the operations of rural banks.'' Mr Montia appealed to directors of rural banks to learn to operate in a disciplined environment to enable them to achieve success.

He said as at January 31 the Asubonten Rural Bank had mobilised 669.5 million cedis in deposits as against 381 million cedis at the previous examination on March 31 2002.

Mr Montia said he was not happy with the bank's paid-up capital that stood at 79.3 million cedis and appealed to the shareholders to ensure that the bank met the minimum capital requirement of 100 million cedis approved for existing rural banks.

In a speech read on behalf of Mr Emmanuel Kwapong, Managing Director of ARD Apex Bank, he said all the 115 rural banks would be computerised within the next three years.

He said ARD Apex Bank's new product in the rural banks, the Domestic Transfer through mail and electronic funds transfer code-named Apex Link, would not only increase income of rural banks but also raise their image and public confidence in them. The Chairperson of the Asubonten Rural Bank, Nana Yaa Opokua I, Oyokohemaa, said the bank recorded a net profit of 60.6 million cedis as at December 2002 compared to 49.5 million cedis recorded in December 2001. She said under the micro-finance project of the bank 85.4 million cedis were disbursed to 140 women to expand their trade.

Nana Yaa Opokua called on the people of the area including shareholders to help increase the capital base of the bank which now stood at 80.9 million cedis.

Mr Joshua Odoom, Manager of the bank, said the bank's treasury bills increased from 400 million cedis to 705 million cedis, a 76.25 per cent growth during the period under review.

He said net advances grew from 79.8 million cedis to 177.1 million cedis; a growth of 121.2 per cent adding that the total advances approved in 2002 was 315 million cedis.

He said beneficiaries of the advances included salaried workers, traders and those engaged in cottage industries and agriculture.