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01.11.2008 Business & Finance

Rural and Community Banks to join foreign cash remittance business


All Rural and Community Banks in the country would participate in foreign cash remittance business soon in partnership with the Western Union Money Transfer.

This arrangement is expected to relieve rural dwellers who travelled to towns and cities to cash monies remitted to them.

Mr Eric Osei-Bonsu, Managing Director of ARB Apex Bank announced this at the 14 Annual General Meeting of North Rural Bank Limited at Guaman in the Jasikan District.

He said already, 85 of such banks had been engaged in the remittance business.

Mr Osei-Bonsu described performance of the North Volta Rural Bank in 2007 as “highly commendable”.

Profit before tax increased from Ghc 44,049 in 2006 to Ghc 89,959 in 2007, representing 104 per cent increase.

Deposits increased from Ghc 554,495 in 2006 to Ghc 953,559 in 2007 an increase of 71 per cent, while total assets increased from Ghc 893,953 in 2006 to Ghc 1,582,656 in 2007, representing 77 per cent increase.

Mr Osei-Bonsu observed that public confidence in rural and community banks had increased as a result of the good performance trends but cautioned that the banks would have to do more to stay in the market.

He said the banks must pursue organizational restructuring, effective credit administration, cost control and reduction.

Mr Osei-Bonsu said the RCBs should improve their customer services and introduce new products to retain their customers.

He said changes in ownership structure and governance of the RCBs that put a new minimum capital up at Ghc 150,000 were designed to grow the banks.

Mr Osei-Bonsu said the challenge now was for them to meet competition “boot for boot”, without any expectation of protection from the regulatory authorities.

He suggested merges if that would make some of the banks stronger to survive.

Dr Patrick Ata, Chairman of Board of Directors of the Bank observed that patronage of the Apex Link Transfer operated by the banks would go down considerably as a result of the introduction of the e-Zwich System, an instant electronic payment method.