The Head, Other Financial Institutions Supervision Department of the Bank of Ghana (BOG), Mr. Raymond Amanfu, has called on external auditors of Rural and Community Banks (RCBs) to be more vigilant and avoid conflict of interest situation.

He warned that the Central Bank would not hesitate to take punitive action against erring and aberrant auditing firms.

He said the BOG had already begun discussions with selected RCBs and external auditors to promote transparency in the accounting process.

Mr. Amanfu was speaking at the 26th annual general meeting of the Asokore Rural Bank Limited at Asokore in the Sekyere East District.

He reminded the banks to comply with the International Financial Reporting Standards and said this required engaging qualified professionals to prepare their accounts.

He spoke of plans by the BOG to assist train key staff and board representatives of the RCBs on financial reporting.

He advised them against operating subsidiary companies without regard to the banking act and said that had led to the collapse or near collapse of many of the rural banks.

Mr. Amanfu said the Board of any such subsidiary company’s must report regularly to the RCB and be properly audited.

They would no longer permit these subsidiary companies to become “a vehicle for fleecing the RCBs”.

Mr. Francis Nyanin, the Board Chairman, said bank’s total assets increased from GH¢11,490,299.00 to GH¢12,752,132.00, last year, representing a growth of 10.99 per cent.

Its paid-up capital also rose from GH¢192,205.00 to GH¢311,959.00, during the period.

The bank declared profit after tax of GH?12,748.00 compared with the previous year’s total of GH¢338,578.00.

Mr. Nyanin attributed the sharp drop in operational returns to the unfavorable business environment and the restructuring exercise it carried out.

He expressed the determination of the management to strengthen the internal control system and improve its loans recovery effort.