Shareholders of Rural Banks nationwide have openly expressed their disapproval of a directive from the Bank of Ghana (BoG) to halt the payment of dividends.

Reacting to the new directive and speaking on behalf of the Association of Rural Banks, Comfort Owusu, the Executive Director of the association indicated that, the order from the BoG has led to a loss of investor confidence in rural banks. She revealed that, since the order, investors and shareholders have become reluctant to invest in the sector.

“Any bank that has to pay dividends will have to write for approval from the Bank of Ghana which they haven’t done. So you could see the shareholders are really not happy because they were expecting that as long as the bank has been able to make some kind of profit, they should be able to get their dividends”, Comfort Owusu disclosed this in an interview with Joy Business.

The banker revealed that the new directive has burdened most Rural Banks as staff are laden with a new task of going the extra mile to explain to agitated investors and shareholders why Rural Banks cannot flout the directives of BoG.

“It’s not easy for us, we’re trying to calm them down for the fact that when things are good they will have their dividends”.

As part of the government’s effort to reduce the impact of the COVID-19 pandemic, the current economic challenges, and the effects of the Domestic Debt Exchange Programme (DDEP) on the financial sector, BoG directed Rural Banks to halt the payment of dividends to investors and shareholders.

The move is also aimed at building the Capital Adequacy Ratio of banks and specialized-deposit-taking institutions.

EAN/MA

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