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03.07.2004 Business & Finance

Lower minimum deposits - Banks urged

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Takoradi, Jul 3, GNA - The Minister of Finance, Mr. Yaw Osafo-Maafo, has observed that the high minimum deposit requirements of some banks have prevented many Ghanaians from operating bank accounts. This has also prevented many salaried workers from taking advantage of banking services since they cannot keep the high minimum balances with banks.

These were contained in an address read on behalf of the Minister at the opening of the Takoradi Branch of the Amalgamated Bank Limited, on Friday.

He expressed regret that the gap between the lending and borrowing rates were too high, saying, "A higher than normal spread in the banking industry connotes some inefficiency and is a disincentive to savings and frustrates the expected positive financial intermediation of the banks". Mr. Osafo-Maafo called on banks to promote the use of cheques and other financial instruments to reduce the cumbersome nature of cash business transactions.

The Finance Minister said banking procedures and processes that created inconvenience to customers should be changed and customer turnaround time reduced.

He therefore called on the banks to develop schemes for small and medium scale enterprises since they constitute about 92.5 per cent of the industrial sector.

The Finance Minister urged banks give loans to the informal sector that may not have the needed collateral but may are credit worthy.

Mr. Osafo-Maafo urged banks to adopt aggressive methods of revenue mobilisation and appealed to bankers to exercise the highest standards of professional integrity to maintain trust and confidence in the banking system.

"Avoid fraudulent dealings and steps should be taken to avoid it," he said.

Mr. Welbeck Abra-Appiah, Managing Director of the Bank, said the financial institution was operating 18 different services with road and building contractors as the target, adding that, household and building materials manufacturers and distributors are other interest sectors. He appealed to the other banks not to use negative marketing strategies to sell their products but should rather adopt strategies to enhance their services and to win the confidence of their clients.

Mr. Steven Ata, Chairman of the Board, said the bank started operations in 1999 and has won two awards for being the best growing bank in 2001 and 2002.

He assured customers of the Bank that it would provide the best financial services to meet their needs.

Mr Ata said a new Internet and SMS banking would soon be introduced to make banking easier and convenient.

Mr. Joseph B. Aidoo, Western Regional Minister, called on the management of the Bank to support the farmers housing scheme initiated by the Regional Co-ordinating Council (RCC) and to assist the private sector for the realisation of the government's vision.

Mr. Asiedu-Mantey, First Deputy Governor of the Bank of Ghana (BOG), asked banks to promote socio-economic development while thinking about profits.

"Banks should therefore develop financial products that would give impetus to the exploitation of the enormous productive potentials of the economy," he added.

He said deregulation of the banking system should promote effective competition to ensure efficiency in the services provided and "at a modest cost to the customer".

Mr. Asiedu-Mantey said the BOG had established a Complaints Unit within the Supervision Department. 03 Jul 04