Rural/Community banks need organisational restructuring – Apex Boss

Rural and Community Banks (RBCs) needed further organizational restructuring and effective credit administration to meet the challenges of the changing competitive business environment, Mr Eric Osei-Bonsu, the ARB Apex Bank, Managing Director on Monday said.
In a speech read for him at the sixth Annual General Meeting (AGM) of the Union bank at Senya Beraku on Saturday, Mr Osei-Bonsu also noted that cost control and reduction measures were also of paramount to the banks.
He said for rural banks to continue to perform the crucial function of rural financial intermediation that would lead to economic and social transformation, they needed continuous support from the shareholders.
Mr Osei-Bonsu called for effective internal control by rural banks to avoid fraud and urged all RBCs to have Internal Audit Unit as part of their management structure.
“The Internal Auditor would help to oversee the implementation of the bank's systems and controls and report directly to the Board or Board sub-Committees”.
Mr Osei-Bonsu advised Boards of RBCs to institute a risk management policy to identity, assess, monitor and control risk.
He said the minimum capital requirements for RBCs was now set at GH¢150,000.
According to him, RBCs whose capital was below the stated capital would not be allowed to pay dividend or opened new branches or agencies until they attained the capitalization.
The Chairman of the Board of Director of the bank, Mr Kwesi Essel-Koomson said it made a profit before tax of GH¢160,066.00 in 2007 as against GH¢89,008 in 2006 representing an increase of 79.83 percent.
He said the banks total asset also increased from GH¢2,108,471.00 in 2006 to GH¢3,742,360.00 in 2007.