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Business News of Tuesday, 9 July 2019

Source: Myjoyonline.com

ARB Apex Bank advises BoG against shutting rural banks

Managing Director of ARB Apex Bank is urging the Bank of Ghana not to close down rural and community banks in the country because they play a major role in driving the financial inclusion agenda.

According to Kojo Mattah, ARB Apex Bank is already working very hard to ensure that all regulatory measures put in place by the central bank are complied with by the rural banks.

ARB Apex Bank is the supervisory institution for rural and community banks spread across the country.

As part of the central bank’s ongoing crusade to clean up the banking and specialised deposit-taking sector, the rural and community banks have been marked for scrutiny.

The Bank of Ghana, since 2017, has been moving step-by-step within the different sectors of the banking space.

The central bank started with the universal bank where nine of them were closed down.

Then it moved into the microfinance and microcredit sector, closing down some 386 institutions.

With the microfinance and microcredit sector clean up almost complete, the rural and community banks are next in line.

However, in an interview with Joy Business’ Norvan Hayford-Acquah, Mr Mattah argued that rural and community banking sector was robust and any shutdown could cut off some citizens of the financial system.

“The rural banks serve a very, very important sector in the economy and for that matter the country,” he said, adding that he was optimistic that the central bank will not just decide abruptly that it was shutting down 20 or 30 rural banks.

He said the few rural and community banks that are struggling or “not very active” are being dealt with.

“We have invited their Directors and we are still discussing with them what they should do be able to bring the banks up,” he said.

He said in some instances, the central bank would have to support ARB Apex Bank to revive the struggling rural and central bank.