BoG won't approve RCBs loans above 2,000 GH cedis

Awutu Bawjiase (C/R), Aug 1, GNA - Bank of Ghana (BoG) will no longer approve loans above 2,000 Ghana cedis that Rural and Community Banks (RCBs) give to their customers, effective July this year. Mr Duke Osam-Doudu, Deputy Managing Director of the Association of Rural Bank (ARB) Apex Bank, who announced this at the 18th Annual General Meeting (AGM) of the Bawjiase Area Rural Bank at Awutu Bawjiase in the Central Region, said the decision was to ensure speedy and prompt payment of loans. He said RCBs were therefore obliged to submit to the BoG, returns on loans they would be granting on a monthly basis to check financial mismanagement of the bank.

Mr Osam-Duodu said as result the ARB Apex Bank would institute policy manual, which would guide RCBs in their loan delivery system. The Deputy Managing Director noted that corporate ownership in the RCBs had been restricted to 50 percent shares, adding that financial institution were not allowed to hold shares in RCBs as banking law required. He said the BoG had also directed that RCBs provide the list of their major shareholders at AGMs.

Mr Osam-Duodu said the new minimum capital requirements for RCB had been pegged at 150,000 Ghana cedis and added that the existing banks were required to grow with their stated capital. He said those with stated capital below 150,000 Ghana cedis would not be allowed to pay dividends to shareholders, open new branches and agencies, according to BOG directives The Deputy Managing Director said the Ghana Inter-Bank Payment System (GIPS) would soon register ARB Apex Bank on the e-Zwich system to link with all RCBs' network. RCBs, he said, would serve as teller agents, depending on their financial strength.

In line to that, Mr Osam-Duodu said Apex Bank was liaising with GIPS to draw up an outreach programme to educate staff, management and directors of RCB, August this month. He commended the Bawjiase Bank for excellent performance and urged shareholders to support its drive of becoming one of the strongest banks in the rural banking sector.

Mr Emmanuel Osei, Chairman of the Board of Directors of the Bawjiase Bank said its profit before tax amounted to 247,359 Ghana cedis, representing a 21 percent increase, as against 204,942 Ghana cedis in 2007. Mr Osei said the bank had set aside a total of 4,555 Ghana cedis as a scholarship fund to support brilliant but needy students Senior High Schools and Universities in the area. Mr Kweku Aquaah, Central Regional President of the Association of Rural Banks, advised shareholders to buy more shares to enable the bank to meet the current capital requirement. He suggested a merger of banks to those institutions which stated capitals were below 150,000 Ghana cedis to promote their effective management and avoid liquidation.