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16.10.2008 Business & Finance

Rural and community banks directed to organise AGM within 18 months

By gna

Mrs Rose Newman, Acting National President of the Association of Rural and Community Banks, has directed all such banks that have failed to hold their Annual General Meeting (AGM) within 18 months, to do so immediately.
She expressed worry that despite the fact that the Banking Law required all banks to organise AGM within 18 months, some banks have failed to comply with the directive.
Mrs. Newman, who is also chairperson of the Gomoa Ajumako Rural Bank, gave the order in an interview with the Ghana News Agency (GNA), after attending the 27th Annual General Meeting of the Gomoa Rural Bank, at Apam in the Central Region.

She said such meetings gave shareholders the opportunity to assess the performances of the banks, especially their financial situations.

Mrs. Newman said “I feel it is not proper to keep shareholders in suspense for years without making them to know how their banks are faring”, adding that this created suspicion among customers.

Mrs Newman said shareholders could not use their shares as collateral for accessing loans and explained the funds were for the development of banks.

She cautioned management of banks not to use deposits of customers for the expansion of their operations.

Mr Eric Osei-Bonsu, Managing Director of ARB Apex Bank Limited, in a speech read on his behalf, urged rural and community banks to introduce internal audit unit as part of their management structure.

He urged the banks to improve their services to enable them to stay in business.

Mr Osei-Bonsu announced that loans above 2,000 Ghana Cedis would no longer require approval from the Bank of Ghana.

He said ARB was making the necessary efforts to bring on board all rural and community banks for foreign remittances following the partnership the bank had entered into with the Western Union Money Transfer.

Mr Osei-Bonsu reminded the banks that under the new minimum capital requirements, rural or community banks with capital below 150,000 Ghana Cedis would not be allowed to pay dividend or open new branches or agencies.

Mr A.B. Simpson, Chairman of the Board of Directors, Gomoa Rural Bank, said the banks profit before tax increased from 20,248 Ghana Cedis in 2006 to 32,748 Ghana Cedis in 2007 representing 61.73 per cent increase.

He said deposits increased from 622,207 Ghana Cedis in 2006 to 759,485 Ghana Cedis in 2007.

Investment increased from 614,700 Ghana Cedis in 2006 to 792,300 Ghana Cedis in 2007 and total assets increased from 867,436 Ghana Cedis in 2006 to 1,106,363 Ghana Cedis in 2007.