Government, BOG asked to protect rural banks from poaching

Kumbungu (N/R), Nov. 16, GNA - The North Eastern Chapter of Association of Rural Banks has called on the government and the Bank of Ghana (BOG) to protect rural banks from poaching of their staff by the traditional banks.

The Chapter, which comprises rural banks in the Northern and Upper East regions, said the rural banks played a crucial role in the rural economy and therefore every effort should be made to mitigate their plight arising from the fierce competition from the commercial banks as markets in the urban areas had become saturated.

Mr. John Asabigi, President of the North Eastern Chapter of Association of Rural Banks, said this in an address at the 8th biennial General Meeting of the Chapter at Kumbungu in the Tolon/Kumbungu District at the weekend. Mr. Asabigi said technological advancement in the banking industry had also heightened the competition.

"It is therefore imperative that management and staff of the rural banks position themselves to effectively confront these challenges".

He said the BOG directive that all rural banks, which had not attained the upgraded minimum share capital of GH¢ 150,000 should not pay dividends to shareholders or open new branches and agencies, though well intentioned, was adversely affecting the ability of the rural banks to improve share capital mobilization.

Besides, he said, it was difficult for the banks to embark on expansion programmes since most of them were still struggling to attain the mandatory stated capitalization.