Rural banks brace for regulatory whirlwind

Rural and Community banks are keenly following developments in the commercial banking space and are bracing themselves for any regulatory challenges that may be thrown their way, the Ashanti Regional Chapter President of the Association of Rural Banks, Patrick Owusu, has said.

Mr. Owusu, who is also Board Chairman of Atwima Kwanwoma Rural Bank, said directors and general managers of various rural banks across the country have really taken a cue from the recent turbulence in the banking sector and are putting their own houses in order to forestall any upheavals.

He assured the ARB Apex Bank, which regulates them, as well as the Bank of Ghana that they will spare no effort in ensuring that their mandate as directors to oversee the efficient management of depositors’ funds and shareholders’ investment is upheld.

“What happened to the seven commercial banks can never happen in any rural bank, because rural banks are not owned by an individual and that is why shareholders elect their directors. Decisions are taken collectively and backed by law. So, it would be difficult for decisions to be taken unilaterally,” he said.

Mr. Owusu also urged customers of rural banks to have confidence in the industry as well as the services they provide, as they will never disappoint them.

The Ashanti Chapter President gave these assurances at the 30th Annual General Meeting of shareholders of Nwabiagya Rural Bank Limited held at Abuakwa in Kumasi recently. The meeting also coincided with the official opening of the bank’s new Abuakwa branch office christened Sika Fie.

He commended the bank for its remarkable contribution to development of the rural banking industry since its establishment some thirty years ago.

The recent developments in the banking sector of the economy, which have exposed deep cracks in the industry, have been attributed largely to the negligence of directors in enforcing prudential standards as well as disregarding good corporate governance practices.