Rural and community banks asked to intensify capital mobilisation

Koforidua, July 27, GNA - Mr Ebenezer Terlabi, Deputy Eastern Regional Minister, has challenged rural and community banks to intensify their capital mobilization so that they could remain in business.

He said that apart from transferring money from their income surplus to stated capital, the banks should make real effort to inject additional capital into the system, to make them stronger.

Mr Terlabi was addressing the 11th National Managers' Conference, organised by the ARB Apex Bank, and rural and community banks, in Koforidua on Friday.

About 170 participants attended the three-day event, being held on the theme: “Ten Years of vital Banking support to the Rural and Community Banks - The Role of the ARB Apex Bank”.

Mr Terlabi said the ARB Apex Bank would develop “off the counter” mechanism for the purchase or acquisition of rural banks shares.

He said this would enable people in the catchment areas of rural and community banks to purchase shares without necessarily travelling to the rural banks to purchase those shares.

Mr Duke Osam Doudu, Acting Managing Director, ARB Apex Bank, said over the past 10 years, the bank had witnessed the growth of the rural banking sector by an annual rate of 30 percent.

He said that rural banks were the largest group of companies that featured in the prestigious Ghana Club 100.

Mr Doudu said that rural banks handled the salary of at least 35 percent of civil servants in the country and a third of payments made to cocoa farmers.

He said, presently, money could be transferred to every part of the country as a result of the linking up of all rural banks by the ARB Apex Bank

Mr Doudu said: “The facilities of various loan packages and projects meant for the rural communities are best done through the ARB Apex Bank”.

He said the ARB bank has mobilised resources of rural banks in order to provide essential services and it has also become a platform for total financial intermediation in rural communities.

Mr Doudu said the rapid decline in the performance of rural banks, which peaked with the withdrawal of the banking licenses of some 23 rural banks in 1999, had been substantially curtailed.

He explained that this was due to support provided by the ARB Apex Bank over the past decade.

The Reverend Divine Nartey, President of Eastern Regional Chapter, Association of Rural Banks, said rural and community banks would continue to play vital role in the financial management of the country.

GNA