Association of rural banks to establish a central bank

Sunyani (Brong Ahafo), 17^th May ‘99 –

A central bank is to be established to supervise the operations of rural banks, Dr. (Mrs.) Gloria Nikoi, vice-president of the association of rural banks said on Saturday.

She said at a seminar organised by the association that the establishment of the proposed bank will be a further revolutionary response to the needs of rural banks in the country.

The proposed bank would help to regulate the operations of the rural banks for more efficiency by taking over some of the functions and supervisory roles of the Bank of Ghana.

Presenting a paper on the project, Dr. Nikoi said adequate groundwork and consultancy by both local and foreign experts had been completed.

Financial support for the take-off of the apex bank is being provided by the Government, and a multi-donor consortium including the International Fund for Agricultural Development (IFAD) the African Development Bank and the Danish International Development Agency.

The vice-president said shares for membership of the apex bank would soon be floated and that rural banks that do not qualify for the shares would become eligible for membership as and when they become financially capable.

Dr. Nikoi noted that losses from operations, deteriorating capital base, and low rate of loan recovery, as some of the problems that face rural banks.

She said these and other problems have been documented and the association has been holding discussions to find lasting solutions.

Out of the 125 rural banks in the country, 50 have been rated satisfactory in performance, 56 have recorded varying degrees of capital inadequacy while 19 are distressed.

GRi…/