GRi Business, Economics & Finance 08 - 09 - 2003

Bank of Ghana revises liquidity reserve ration of Rural Banks

Awutu-Beraku (Central Region) 8 September 2003 - The Bank of Ghana (BOG) has revised the liquidity reserves rations of Rural and Community Banks to ensure the maintenance of adequate liquidity to back their operations.

Rural and Community banks are therefore, expected to place five per cent of their deposits with the ARB APEX Bank, maintain 8 and 30 per cent of such deposits as primary and secondary reserves, respectively.

This brings to 43 per cent to total reserves to be maintained by the smaller banks as total deposit liabilities, instead of the previous 62 per cent. The Central Bank has therefore, directed all rural and community banks to comply with the new system.

Addressing the 15th annual general meeting of the Awutu Emasa Rural Bank at Awutu Beraku at the weekend, Philip E. Cobbina, Deputy Chief Manager, Banking Supervision Department of the Bank of Ghana, said as more funds are now available for lending, banks are advised to review and strengthen their credit administration processes in order to improve credit recovery and credit delivery.

He charged loan beneficiaries to meet the contractual obligations to the banks promptly and regularly, in order to make credits available to sustain the socio-economic development of the bank's catchment area.

Cobbina also appealed to shareholders and people in the Awutu Traditional Area to buy more shares to increase the paid-up capital of the Awutu Emasa Rural Bank to help the bank to offer more credible and sustained service to them.

He advised shareholders of the various rural and community banks to take advantage of the Bank of Ghana's recently-revised share acquisition by individual and institutions in rural and community banks from 10 per cent and 30 per cent to 20 per cent and 50 per cent, respectively to better their lot.

Cobbina urged rural and community banks to ensure the enforcement of the code of conduct for rural and community banks by penalising staff who misconduct themselves in order to inject a high level of discipline in their activities.

He advised rural banks to liaise with District Assemblies, Ministry of Food and Agriculture, and private enterprises foundation to design programmes aimed at introducing customers to income-generating activities.

Cobbina also charged rural and community banks to play a leading role in the implementation of the President's Special Initiative on Cassava and Palm Oil Ventures by introducing their numerous customers to the two initiatives.

K.A. Kusi of APEX Bank enlightened the teeming shareholders, who attended the meeting on the benefits they would derive from the newly-introduce APEX Moneyline and asked them to take advantage of the system to save them from illicit activities of tricksters and armed robbers, especially on the highways.

He said the system will connect all rural banks as soon as the communication network being implemented by the APEX Bank is completed.

Abraham K. Larbie, chairman of the Awutu Emasa Rural Bank's board of directors, told the meeting that the bank made after-tax profit of ¢337m out of which ¢20m was set aside for the payment of annual bonuses to shareholders.

Larbie said the bank granted loans totalling over ¢1.6bn to some 579 customers, including agricultural and cottage industrialists, farmers, traders, artisans, workers and transport operators during the year under review. He said the bank mobilised a total deposit of ¢5.97bn and invested ¢3.34bn in treasury bills.

According to Larbie, the Bank's paid up capital stood at ¢103.467m. Earlier, John Kofi Anomah, Mupervising Manager of the bank had disclosed that the bank has granted scholarship to four needy but brilliant Junior Secondary School students last year to pursue Senior Secondary education in the area. Each student was given ¢500,000.
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