Mr Yaw Sapong, Head of Other Financial Institutions and Supervision Department of the Bank of Ghana (BOG), has urged the Rural and Community Banks (RCBs) to take advantage of the emerging digital banking system to roll out tailor-made digital products and services for their clients.

The Head of Other Financial Institutions and Supervision Department of the Bank of Ghana (BOG) made the call at a meeting with the Heads of Rural and Community Banks at Ejisu. He noted that digitalization is the surest way for Rural and Community Banks to help create opportunities and sustain rural economic activities in this digital era.

According to Mr Yaw Sapong, the digital banking system must come with appropriate risk management structures to improve operational efficiency, deepen financial inclusion and increase customer satisfaction.

The Head of Supervision Department of Bank of Ghana disclosed that BoG has created a Financial Technology and Innovation Office, as well as a regulatory sandbox, which will allow industry participants to test their digital products and services in a controlled environment.

Mr Yaw Sarpong added that the National Payment Systems Strategic Plan (NPSP) also established policy direction and guidelines that would foster an enabling environment for the development of the country’s payment and financial systems. He therefore, implored the RCBs to do their best to join the digital train and the NPSP.

Ghana among the Leaders in Digitalization in Africa

Mr Sapong indicated that, Ghana is among the leading African Countries to begin piloting the Central Bank Digital Currency (CBDC), the Electronic Cedi (E-Cedi) platform. This, he said, is being tested and trial phases carried out with the banks, payment providers, merchants, customers, and other stakeholders before a nationwide roll-out.

He stated that the e-cedi, which the Bank of Ghana is implementing, seeks to facilitate transactions without the need for power or connectivity.

Mr Sapong noted that this would present an opportunity to build a robust, inclusive, competitive, and sustainable financial sector.

He stressed the need for RCBs to collaborate with ARB Apex bank and other stakeholders to leverage on the opportunities available with digitization within the payment ecosystems.

Mr Sapong also appealed to key stakeholders in the RCB industry, to build appropriate synergies for the sector. He subsequently asked the Association of Rural Banks to hold their members to acceptable ethical and performance standards.

Mr Sapong pledged the BOG’s support for the growth of Rural and Community Banking in the country.

The E-cedi to Complement Traditional Currency

The E-cedi is expected to complement the traditional cedi. As such, it would be afforded the power to make payments, buy and function in the same capacity as the Fiat currency. This would help meet the country’s economic digitization goals.

The E-cedi will also promote a cashless society by either complimenting or replacing the traditional Fiat currency. Across most African developing countries, there is a steep rise in cashless transactions such as Mobile Money. The E-cedi is expected to be a more efficient and cost effective way of transacting. CBDC transactions cut out intermediaries, making consumers pay less for direct transactions.

With this in sight, Mr Sapong admonished the Rural and Community Banks to embrace the digital banking system to help them grow.