Rural Banks urged to adhere to operational guidelines

Mr Kwadwo Aye Kusi, Managing Director of ARB Apex Bank Limited, at the weekend advised Rural and Community Banks (RCBS) to ensure strict adherence to the guidelines and operational rules of the Bank of Ghana (BoG).

This, he observed would enable the RCBs to avoid unnecessary penalties and sanctions from the BoG. Mr Kusi emphasized that the RCBs ought to follow the ARB Apex Bank regulations to enable them mitigate the threats and vulnerabilities likely to impact negatively on their operations.

The Managing Director gave the advice in a speech read on his behalf at the 28th Annual General Meeting on the Kintampo Rural Bank at Kintampo in the Brong-Ahafo Region.

Mr Kusi noted that banking business had become very competitive and risky and RCBs ought to evolve strategies to identify, assess, monitor and control operational and credit risks by operating within the confines of the BoG and ARB Apex regulations.

By so doing, he noted would not only strengthen the RCBs internal control systems, but would also add value to operations and enhanced their performances. Mr Kusi emphasised that with the current pace of Information Communication Technology (ICT), rural banks would no doubt be assuming additional risks and stressed the need for an effective risk management at all levels of corporate structure.

He observed that banking nowadays was dependent on the provision of quality service to customers and was therefore important that RCBs refocus attention in addressing customer service by investing in training programmes that would help their staff to improve on service delivery.

To ensure that rural banking system attracted more attention and interest from the public, Mr Kusi said the ARB Apex Bank would continue to provide efficient services to enhance the image of the industry.

This, he added was why Apex was developing a new strategic plan for the period 2014-2018, focused on providing efficient services to the RCBs for improved customer satisfaction and creating a platform in which the unbanked and under-banked might participate. “The new direction of the Apex bank would certainly include an enhanced ICT platform to support RCBs and multi-channel delivery strategy”, Mr Kusi said.

The Managing Director explained that the ARB Apex Bank had signed an agreement with a service provider for the deployment of the Arch-mobile product, a computerized platform which essentially used mobile phones to transact banking business like payment, transfers, checking of balances, short messaging system alert and other related transactions.

This would not only diversify the RCBs income streams but also increase their profits in order to ultimately maximize shareholder value. Dr Samuel Donyina Ameyaw, Chairman of Board of Directors of the Kintampo Rural Bank, said the total business of the bank increased by 21 per cent from GH¢11.09 million to GH¢13.43 million, while total deposit grew by 33 per cent to reach GH¢9.32 million.

While salary workers advances increased significantly by 94 per cent to reach GHC3.05 million, credit to support commercial and agricultural activities improved only by 12.1 per cent to reach GH¢2.79 million, he added.

Dr Ameyaw disclosed that total income of the bank increased by 55 per cent and stood at GH¢2.02 million with operating profit rising to GH¢0.90 million registering a growth of 52 per cent, net profit increased by 53 per cent to GH¢0.83 million, and non-interest income registering a growth of 25 per cent.

He said the bank believed that acquisition of new clients and nurturing the relationship with existing clients could only augment steady and sustainable growth adding, with this firm conviction and commitment, the bank added 3,597 new customers to make a strong contingent of 47,130 customers.

Dr Ameyaw expressed appreciation to all shareholders, customers as well as management and staff of the bank for their contributions towards its growth and acknowledged the support of auditors, legal advisors, consultant and other sister banks.

Mr Michael Justice Baffoe, Kintampo Municipal Chief Executive, said the government recognized the immense contributions of RCBs in providing financial intermediation in rural communities.

He said it was in recognition of this role that rural banks were entrusted with the disbursement of various credit schemes for farmers to support agriculture and other mirco-productive activities in the rural areas.

Mr Baffoe appealed to rural banks to ensure that credit facilities were always available for farmers especially those in deprived areas to enable them go into large scale farming for poverty reduction.