Rural/Community banks make progress

Apam (C/R), Sept. 30, GNA - Rural/Community Banks in the country have mobilised a total deposit of 739.176 billion cedis as at the end of June 2003.

The total credits channelled into the economy by the banks was 273.909 billion cedis whilst their total asset base stood at 976.895 billion cedis.

Mr S.T. Essel, Deputy Chief Manager, Banking Supervision Department, Bank of Ghana announced this at the 22nd annual general meeting of Gomoa Rural Bank at Apam.

Mr Essel announced that the Bank of Ghana (BoG) has proposed that banks with surplus reserves should convert them into share capital by the issue of bonus shares.

He said the proposal was to help banks, which have not raised their minimum capital of 100 million as required by Bank of Ghana to do so. He said as at June 30, 2003 only 75 out of 115 rural/community banks in the country were able to raise their capital to the required level.

Mr Essel announced that Bank of Ghana has revised its directive on share acquisition by individuals and institutions in rural banks from 10 and 30 per cent to 20 and 50 per cent respectively. This means an individual could now acquire 20 per cent of the total share capital, whilst an institution could acquire 50 per cent of the total share capital.

He said in order to enhance further the operations of rural banks, BoG has revised the liquidity reserve ratios maintained by the rural/community banks.

They are now expected to place five per cent of deposits with the Apex Bank, maintain eight per cent primary reserve ratio and hold 30 per cent of deposits as secondary reserves.

Mr Essel said the implication of this directive is to enable the banks to provide more credit in the rural economy.

Mr Emmanuel Kwapong, Managing Director, ARB Apex Bank, in a speech read on his behalf said the Apex Bank and rural banks were collaborating with the various government programmes such as the Social Investment Fund, the Women's Development Fund and the Village Infrastructure Project to fight poverty.

Mr. Kwapong said the Apex Link, a domestic funds transfer service launched three months ago to facilitate the transfer of funds across the country using rural banks has received a tremendous patronage. He said the Apex Bank was facilitating the purchase of cocoa through the use of Akuafo Cheques by arranging with the Produce Buying Company (PBC) to channel funds to the rural/community banks through the Apex Bank.

Miss Joyce Mildred Aidoo, Gomoa District Chief Executive in a speech read on her behalf cautioned banks against sacrificing the interest of the poor, who are in the majority for the few rich and influential people.

This, Miss Aidoo said, has made many people lost confidence in banking institutions.

The DCE urged the banks to be supportive of programmes initiated to reduce poverty.

They should also help in promoting production of non-traditional crops.

She, however, appealed to farmers and fishermen to cultivate the habit of repaying loans granted to them.

Mr A.B. Simpson, the Chairman of the Board of Directors in his report said the bank's total deposit rose from 1.4 billion cedis in 2001 to 2.1 billion in 2002 whilst investment in treasury bills increased from 1.1 billion cedis to 1.6 billion cedis.

He said loans and overdrafts to customers shot up from 40.5 million in 2001 to 121 million cedis in 2002.

He said the bank made a net profit (after tax) of 100.8 million cedis in 2002 as compared to 86.2 million cedis made in 2001. 30 Sept. 03