Rural banks advised to improve operations

Directors, shareholders and managers of rural and community banks (RCBs) in the country have been advised to adhere to prudential regulations of the Bank of Ghana (BoG) and the ARB Apex Bank to pre-empt regulatory sanctions.

Mr. Joseph Kofi Amoa-Awuah, Head of the Other Financial Institutions Supervision Department at the BoG who was speaking in Ho – at the last in a series of annual zonal Banking Operations Conferences for directors and general managers of RCBs from the Greater Accra, Eastern and Volta Regions – said it was not in the interests of the BoG to be penalising the RCBs for regulatory infractions.

He said the BoG and ARB Apex Bank have instituted a lot of prompt corrective actions aimed at ensuring that all the RCBs can continue to operate efficiently.

“Prompt remedial and corrective action instituted by the BoG, Apex Bank and the RCBs themselves can prevent the situation where RCBs would continue to ask for liquidity support from the ARB Apex Bank to shore up their operations,” he said.

Mr. Amoa-Awuah charged the RCBs to prepare for introduction of the Ghana Deposit Protection Scheme, which is aimed at giving depositors of banks “some guaranteed minimum reprieve in the unlikely event of a rural bank being liquidated”.

He said he was happy that the meetings were organised on zonal basis, which allowed for greater interaction and participation between the RCBs and the two regulatory institutions.

Mr. Amoa-Awuah also encouraged directors and shareholders of RCBs which have not yet met the mandatory minimum operating capital of GH¢1million set by the regulator to endeavour to meet the requirement before the end of 2018.

Mr. Kojo Mattah, Managing Director of the ARB Apex Bank, urged the RCBs to collaborate more and stop perceiving partner RCBs as their competitors, adding: “The only direct competition we face is from the commercial banks and other non-bank financial institutions”.

He said he believes that “we can succeed better through greater collaboration among ourselves”, and charged the RCBs to endeavour to tap into the core ICT banking platform introduced by the ARB Apex Bank so as to provide enhanced products and services for their customers.

He noted that the ARB Apex Bank has also introduced automated teller machines (ATMs) to the RCBs, adding that the Bank is in a position to assist RCBs procure ATMs to help offer greater convenience to their valued customers.

He revealed that customers are becoming more sophisticated, and charged the RCBs to innovate in order to meet customer demands; noting that “we believe in deploying modern alternative banking channels to delight RCB customers”.

Mr. Mattah said the ARB Apex Bank had supplied needed equipment to many of the RCBs to help them issue ATM cards to their customers at their branches.

He indicated that the ARB Apex Bank is also coordinating the development of many products to suit the needs of RCBs’ customers.

Mr. Alex Awuah, Deputy Managing Director of the ARB Apex Bank, tasked directors of the RCBs to take advantage of all the special initiatives being introduced by the regulators to improve upon their operations and enhance shareholder value.

Mr. Awuah also encouraged the banks to remain under the ‘umbrella’ of the ARB Apex Bank in order to enjoy the economies of scale which come with operating within the family of rural banks with the largest number of bank branches in the country.

This year’s meetings organised by the ARB Apex Bank were held in Kumasi for RCBs in Ashanti and Brong Ahafo; Tamale for RCBs in the three northern regions; Agona Nkwanta for RCBs in Western and Central Regions; and Ho for RCBs in the Greater Accra, Eastern and Volta Regions.

The ARB Apex Bank is the ‘mini’ central bank for the 141 rural and community banks operating in the country.