Rural banks urged to ensure the safety of savings

Prang (Brong Ahafo) 13 Dec '99

Rural banks have been advised to ensure the utmost safety of deposits of customers and be fair in the allocation of loans to engender greater public confidence and patronage of their operations.

Mr Stephen Ameyaw, Head of the Rural Finance Department of the Bank of Ghana gave the advice at the 14th annual general meeting of the Yapra Rural Bank, at Prang in the Atebubu District at the weekend.

Mr Ameyaw said most of the rural banks, which have collapsed ceased to be viable because of massive ''retaliatory withdrawals'' by customers, who lost confidence in the banks due to slowness in loan allocation and mismanagement of deposits through fraud.

"'There is, therefore, an urgent need for rural banks to exhibit open and sound management and investment practices and be fair in the allocation of resources to communities in their areas in order to retain the trust of customers and remain viable, he emphasised.

Whilst urging shareholders of rural banks to increase their share holdings, he also asked staff to buy shares of their banks to demonstrate their confidence in their viability.

The Chairman of the Bank Board, Nana Rabiu Haruna said the Bank made a net profit of 27.8 million last year as against 42.5 million cedis in the previous year.

Nana Rabiu attributed the drop in profit to the massive reduction in the discount rate of treasury bills and high operational cost.

He said the Bank was able to grant loans totalling 353 million cedis to customers and appealed to beneficiaries to repay them on schedule to enable others to enjoy the facility.

GRi../