The President of Brong Ahafo Chapter of the Association of Rural Banks, has noted that bad and doubtful debts seriously reduce the net profit of rural banks and other financial institutions and must not be encouraged.

Mr. Kofi Bonsu Boakye-Boateng challenged the credit department and management of loans and advances of the banks to adopt legal and civilised strategies to retrieve over aged advances and loans offered to customers, which he said could have adverse effect on the growth and development of the banks.

Mr Boakye-Boateng was addressing the 27th annual general meeting of shareholders of Nkoranza-Kwabre Rural Bank at Akuma.

He expressed concern about how the bank had been forced to declare about GH?150,000 as doubtful debts because some loan beneficiaries had refused to pay back.

“If such a negative practice is not checked it would become a common practice for recalcitrant customers to dupe the bank and thus collapse its operations,” he added.

The chapter president called on the management of the rural banks to create bonus shares for shareholders by transferring some of their profits to stated capital periodically to encourage shareholders to purchase more shares to increase the capital of the banks.

Mr Boakye-Boateng also advised management of the banks to honour their tax obligations and to ensure the timely submission of their prudent returns to the Bank of Ghana, to maintain their credibility and responsibility as corporate institutions.

Mr Joseph Tachie-Djan, Chairman of the board of directors of the bank announced that the bank realised a net surplus of GH?21,127.00 during the year under review as against the previous year loss of GH?33,443.00.

He said the bank’s total deposits increased from GH?2,288,308.00 to GH?2,546,344 whilst its investment stood at GH?625,321.00

The ordinary shares of the bank increased from GH?94,497.00 to GH?112,021.00 whilst fixed assets jumped from GH?207,792.00 to GH?300,920.00.

The board chairman said the bank gave GH?1,549,782.00 as loans and advances to customers and the amount represented an increase of 38 per cent over the previous year’s figure of GH?1,119,896.00

In an address read on his behalf, Mr Emmanuel Kwadwo Agyekum, Nkoranza South District Chief Executive, commended the shareholders for coming together to establish a bank to enhance the development of the communities.

He urged management of the bank to visit the people at home and workplaces to educate them about their products, to win more people to patronise their activities.

Mr Claver Dadzie, Manager of Sunyani branch of the Association of Rural Banks Apex Bank Limited, stressed the need for the workers of the bank to redouble efforts to win more customers.

He expressed concern about the inability of the bank to meet the demands of Bank of Ghana in recording a share capital of GH?150,000 and urged the stakeholders to redouble efforts to achieve the target.**