Mponua Rural Bank Board of Directors dissolved

Amuana Praso (E/R), May 30, GNA- Shareholders of Mponua Rural Bank at Amuana Praso in the Birim North District, have dissolved the eight-member Board of Directors of the Bank for gross financial malpractices, which has affected the effective operations of the financial institution. The appointment of the Supervising Manager, Mr. Emmanuel Opoku and External Auditors, Messrs Kobina Whyte and Co Limited have also been terminated. Consequently, a five-member Interim Management Committee (IMC) and a relieving Manager have been appointed to manage the affairs of the Bank.

Mr. Daniel K. Owusu, a Chief Manager of the Banking Supervision Department of Bank of Ghana, announced these at an extra-ordinary general meeting of the Bank at Amuana Praso.

He said due to extremely weak oversight responsibility of the Board, substantial credit facilities were granted to some directors and their spouses and the external auditors without approval by the Bank of Ghana as required by section 43 of the Banking act. Mr. Owusu said management of the Bank also ignored the advise of Bank of Ghana on the construction of the bank's head office building and borrowed money in respect of the project. He said this affected the profitability of the Bank while the management of the financial institution also concealed substantial expenses on items purchased by falsification of financial statements to the Bank of Ghana. The Chief Manager said, ineffective internal audit system led to pre-signed payment order instrument, which resulted in fraudulent practices at the Bank's agencies resulting to overdrawn balance of 418 million cedis in the payment order account. He said the bank also failed to prepare periodic reconciliation for accounts in relation to cocoa purchase payment order, treasury bills and other investments, which led to imbalances in the banks ledgers. More

Mr. Owusu said when the Board realized the serious nature of the Supervising Manager's misconduct, he was summarily dismissed while the directors resigned emblock, which paved the way for recruitment of a new Supervising Manager to manage the Bank.

He advised the IMC members to provide effective oversight and corporate direction for the Bank to remain focus and to organize annual general meeting to elect substantive Board within one year. Mr. Owusu urged the IMC to introduce measures to control cost, increase deposits and ensure early recovery of all overdue loans including those of the ex-directors and staff.

He urges the IMC to also strengthen internal control system to safeguard the Bank's asserts. In an address read on his behalf, the Managing Director of ARB Apex bank, Mr. Emmanuel Kwapong said the country's economy was predominately cash-based with most of the currencies outside the Banking system.

He called for effective deposit mobilization efforts through the development of appropriate packages and products to enable all banks to mop up the excess liquidity outside the banking system. Mr. Kwapong said rural banks needed an efficient and effective management to harness resources, He advised that persons appointed to serve on boards and managements of rural banks must have the requisite academic and moral backgrounds to meet the challenges peculiar to the banking industry. Mr. Kwapong said the Apex Bank in collaboration with the Bank of Ghana was organizing a nation-wide training on the re-domination exercise, which would commence in July this year.

He urged directors, management and staff of all rural and community Banks to be part of the exercise to enable them effectively educate the public on the redenomination. 30 May 07