BANK OF GHANA CAUTIONS RURAL AND COMMUNITY BANKS

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   13-10-2014   BOG CAUTIONS RURAL AND COMMUNITY BANKS
    The Bank of Ghana has cautioned Rural and Community Banks in the country to avoid paying unsustainable interest on deposits and investing in very risky assets with high interest rates. The Central Bank has noted with concern that some of the Rural and Community Banks have adopted such strategies to remain attractive in the highly competitive banking industry. The Head of Other Financial Institutions Supervision Department of the Bank of Ghana, Raymond Amanfo who gave the caution noted that the 86 point-four percent high cost-income ratio of rural and community banks in Ghana as at July this year, is unacceptable. Mr. Amanfo was addressing shareholders of the Amansie West Rural Bank at Akrokerri in the Adansi North district of Ashanti during their 29th Annual General Meeting which also coincided with the 30th anniversary of the bank. Mr. Amanfo asked also the RCBs to stop the use of deposits to fund fixed assets. They should instead aim at reducing non-performing loans ratio which all together stood at 14 point four-one percent with that of the Amansie West Rural Bank pegged at more than 23 percent as at July this year. The Bank of Ghana official disclosed that there are currently 138 Rural and Community Banks spread across the country with a total assets of one million, 886 thousand Ghana Cedis while total deposits stand at one million, 411 thousand Ghana Cedis representing a 15 point eight-three percent growth over the previous year’s figure. However, the sector has registered a four point three-four percent decline in total share of RCBs in the banking industry in the country. Mr. Amanfo asked the RCBs to reconsider the distribution of their credit by placing greater premium on Agriculture and cottage industry since the two are the dominant economic activities, particularly in the rural areas. In a report, the Chairman of the Amansie West Rural Bank, Isaac Otchere-Antwi, noted that notwithstanding the serious impact of the uncertainty regarding outcome of the 2012 Presidential election petition, the national economic down turn and unreliable power supply during the 2013 financial year, the bank was able to increase its pre-tax profit to one million, 496 thousand Ghana Cedis translating into more than 63 percent over the 2012 figure. Its deposits however rose by five per cent to 27 million, 306 thousand Ghana Cedis. Mr. Otchere-Antwi disclosed that the bank spent 57 thousand, 711 Ghana Cedis on its corporate social responsibilities. The bank declared a total of 337 thousand, 768 Ghana Cedis as dividend for shares in the bank. The Bank rewarded 15 of its staff, including the General Manger, George Osei Mensah for their long and dedicated service and eight customers selected from the various branches with plagues, flat screen television sets and undisclosed sums of money for their loyalty to the bank.
NOW                                                END

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