Apex bank for rural banks underway
Alternative Dispute Resolution necessary investment - A-G
Accra (Greater Accra) 27 June 2000
The cedi depreciated further this week to new lows as more pressure mounted on the beleaguered currency and the authorities appeared to be doing little to save it.
The cedi which ended last week against the dollar at 5,200 for selling and 5,500 for buying on the forex bureaux, slid further on Tuesday at 5,500 for selling and 5,800 for buying.
The pounds sterling was stronger against the cedi at 8,200 cedis for selling compared with 7,800 cedis at the weekend and 8,700 cedis for buying compared with 8,300 cedis.
Forex bureau operators said they were battling with a dry supply situation and complain of lack of business.
The country was thrown into a virtual state of panic around the Easter when the cedi hit new lows against the dollar at about 5,500 cedis on the black market from a comparatively stable 3,500 cedis at the beginning of the year.
The government took swift measures, including stiff directives to the forex bureau on terms of business while the security agencies arrested 35 black market dealers in foreign currency. The government was criticised by economic analysts for the swoop against black market operators.
The steep decline of the cedi has contributed to soaring prices of goods and services with traders cashing in.
Accra (Greater Accra) 27 June 2000
The Association of Rural Banks (ARB) and a number of collaborators and financiers have put concrete measures in place to establish an Apex Bank, which will effectively link all rural and community banks operating in the country by December this year.
In an interview with the Ghana News Agency on Tuesday, Mrs Eunice Osei-Bonsu, Public Relations and Marketing Manager of ARB, said currently there is a secretariat in place, being manned by a manager and a secretary who are co-ordinating activities between the ARB and financiers of the project.
She said currently, legal consultants appointed by the ARB are also preparing the legal framework for the project. Their work is expected to be completed and submitted to the Transition Apex Steering Committee (TASC) for scrutiny and implementation by the close of next month.
Mrs Osei-Bonsu said the legal framework will spell out the relationship between the Apex Bank and the Bank of Ghana (BOG), the rural and community banks, the ARB and other banks.
It will also spell out the relationship between the BOG and the rural banks as well as between the BOG and ARB.
When the Apex Bank is finally in place, it would serve as a central bank for rural and community banks.
"As a central bank, the Apex Bank would provide cheque clearing service ... and management service, provide funds management services and guarantee support for rural and community bank cheques.
"The Apex would also source domestic and external funds for rural banks, provide inspection services and credit delivery and management service as well as support for deficient banks."
Mrs Osei-Bonsu said the bank would also offer such non-banking services as training for staff of rural and community banks as well as provide deposit insurance for such banks.
These, she said, would save the rural banks and their customers from the difficulties they face in clearing their cheques in other banks and also restore public confidence in the rural and community banks.
A document obtained by the GNA from the ARB said 22.7 million dollars has been put together to finance the project.
It mentioned the financiers and their contributions as the government of Ghana, 750,000 dollars, World Bank, five million dollars and African Development Bank (AfDB), 5.070 million dollars.
The other financiers are the International Fund for Agricultural Development (IFAD), 10 million dollars with beneficiaries of the Apex Bank contributing a token of 20 million cedis each to make 1.95 million dollars.
The document stated that the money from the World Bank, IFAD and AfDB are loans to the government under the Rural Financial Services Project (RFSP) for the Apex Bank and other projects.
The document said that membership of the Apex Bank would be on the basis of share ownership and rural banks wishing to own shares in the bank must fulfil laid-down requirements.
It mentioned the requirements as a positive networth, a capital adequacy ratio of at least 6.5 per cent and all other requirements of section 14(2) of the Banking Law, PNDC Law 225, for rural banks.
Mrs Osei-Bonsu said banks in good standing would be made to buy the mandatory 20 million cedis worth of shares up-front, while for the other banks the amount would be spread over a 10-year period. Cost per share is not yet known.
She said the hiring, renovation furnishing, computerisation and capitalisation of the head office and four other branches of the Apex Bank is estimated to cost 7.961 billion cedis.
Mrs Osei-Bonsu called on all the 111 rural and community banks in the country to start ordering the shares now.
At their Annual General Meeting (AGM) last Saturday, the Abokobi Area Rural Bank (AARB), passed a resolution to join the Apex Bank.
GRi../
Elmina(Central Region) 27 June 2000
Dr Obed Asamoah, Attorney General and Minister of Justice, on Monday stressed the need for an Alternative Dispute Resolution (ADR) mechanism to enhance private sector investment.
This follows complaints from the business community that the court-process takes too long and is expensive and that with increasing economic activity in the private sector the courts cannot cope with the expected rise in commercial disputes.
Opening a workshop on the ADR Draft Bill, which is expected to replace the Arbitration Act of 1061, at Elmina, Dr. Asamoah mentioned dispute resolution mechanisms such as arbitration under Act 38, of the 1961 Arbitration Act, the Industrial Relations Act and through CHRAJ but expressed regret that despite these arrangements ADR is not used as expected.
Representatives of the Bench and Bar, Association of Ghana Industries, Ghana Chamber of Commerce and some parliamentarians are attending the three-day workshop organised by the Ministry of Justice.
They would asses the type of ADR mechanisms favoured and make suggestions on the draft Bill to enable the Ministry to make an informed submission to Parliament.
The Minister noted that it is in this regard that the government has been giving serious consideration to the establishment of a more valuable ADR, adding that, "it is necessary to have them, build confidence in them and have them accepted as an effective alternative to the court system".
GRi../