GRi BEF News Ghana 15 - 10 - 2001
Central Bank to close down unapproved agencies of rural banks
Kintampo (Brong Ahafo) 15 October 2001-The Bank of Ghana (BOG) is to close down the operations of all unapproved agencies of rural banks, Mr. Daniel Owusu, Deputy Chief Manager, Banking Supervision Department of the bank said at the weekend.
He said some rural banks had opened several agencies in the rural areas without the approval of the BOG in a desire to mobilise more deposits.
Addressing the 16th annual general meeting of the Kintampo Rural Bank, he expressed regret that such agencies are opened without taking into account staff strength and competence, adequacy of residual shareholders' funds to cover initial capital investment and compliance with other Bank of Ghana requirements.
The Deputy Chief Manager said "such agencies are poorly run and supervision becomes a problem for management.
"The situation culminates in fraudulent practices and poor book-keeping, resulting in substantial losses."
Mr. Owusu said most rural banks also engage in the operation of "Susu" savings schemes without instituting adequate controls to safeguard funds that are mobilised.
"We suggest that persons engaged in these schemes should be properly trained and equipped to handle the resources mobilised so as to benefit the rural banks."
Mr Owusu gave the assurance that the central bank would not relent in its efforts to ensure the steady growth and development of an efficient rural banking system, capable of providing financial services and opportunities to galvanise economic activities in the rural areas.
To this end, the Bank of Ghana will continue to guide and regulate operations of rural banks through effective supervision, encourage the enforcement of rules and regulations and introduce prudent norms, among others, he said.
Mr. Kwaku Poku, Chairman of the Board of Directors in a report said the bank made a profit (before taxation) of 434.8 million as against 71.91 million cedis in 1999.
He said interest income went up from 387.1 million cedis in 1999 to 929 million cedis in last year, while interest expenses increased from 146.1 million to 236.3 million cedis.
The total assets of the bank leapt from 1.5 billion in 1999 to nearly 4 billion cedis last year, an increase of more than 166 per cent, the board chairman added.
Mr J.K. Bomfeh, District Chief Executive for Kintampo said despite the bank's tremendous achievements, "it still has to intensify efforts to mobilise excess and dormant funds still outside the banking system in its catchment areas.
To be able to do this, the DCE urged the bank to offer appropriate incentives to its customers by developing and offering new and innovative services and products.
He said the present central accounting system should be decentralised to facilitate quicker withdrawals, he said.
GRi…/
Send your comments to viewpoint@ghanareview.com