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03.11.2008 Business & Finance

Rural Banks To Enter Foreign Remittance Business


All Rural and Community Banks (RCB) in the country are to enter the foreign remittance business by the close of the year in partnership with the Western Union Money Transfer.

This arrangement is expected to bring a big relief to people in the rural areas who travel to towns and cities to cash money remitted to them at the bigger banks.


Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank Limited said this at the 14 annual general meeting of the North Volta Rural Bank Limited held at Guaman in the Jasikan District. He said already 85 of such banks are engaged in the remittance business.


Mr Osei-Bonsu described performance indicators of the North Volta Rural Bank Limited in 2007 as, 'highly commendable'. Profit before tax increased from GH¢ 44,048.72 in 2006 to GH¢ 89,959.00 in 2007, representing a whopping 104 percent increase.


Deposits increased from GH¢ 554,495.00 in 2006 to GH¢ 953,559.00 in 2007 an increase of 71 percent, while total assets increased from GH¢ 893,953.00 in 2006 to GH¢ 1,582,656.00 in 2007, representing 77 percent increase.


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


He said the banks must pursue organisational restructuring, effective credi administration, cost control and reduction.


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


He said changes in ownership structure and governance of the RCBs that put a new minimum capital up at GH¢ 150,000.00 were designed to grow the banks.


Mr Osei-Bonsu said the challenge now is for the RCBs to meet competition 'boot for boot', without any expectation of protection from the regulatory



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


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