The Association of Rural Banks (ARB) cries over the delay in payment of Ghc450 million locked up funds of some Rural and Community Banks (RCBs) that tends to be with some defunct financial institutions and banks affected by the banking sector clean-up exercise.
Mr. Kwame Owusu Sekyere, the Acting National President of the Association of Rural Banks (ARB), spoke on this issue at the opening of the 22nd Biennial General Meeting and 4th Rural Banking Excellence Awards ongoing in Koforidua under the theme ” The Role of Rural Banks: Growing Resilient RCBs in the Contemporary Ghanaian Economy”.
According to Mr. Kwame Owusu Sekyere, he expressed that, all attempts made by the RCBs to claim back their locked-up funds with some non-existence financial institutions especially those regulated by the Security and Exchange Commission (SEC), NTC and SIC financial services have failed. He stated that, this has resulted in the adverse effect on their member banks profitability and capital liquidity ratio.
“We submit once again to the government to help in the resolution of this matter. And it’s very imperative because the fact is that we’ve been talking to NTHC and it appears that NTHC does not have the money; the liquidity to give us, and also, they don’t have the collateral to support any arrangement that we want to have. And so, we’re in a dead end.
“The other thing is that, we approached the Security and Exchange Commission (SEC) and SEC is telling us that substantial part of the money that is locked up at Black Shield because liquidation order has not been granted to the SEC, hence they cannot do anything.
“Meanwhile, monies locked up is about Ghc450 million. It’s our fervent belief that payment of the locked-up fund will unleash the full potential of the Rural Banking sector to support the nation’s development.”
Mr. Kwame Owusu Sekyere
Introduction Of the Risk-Based Supervision Approach
Mr. Yaw Sarpong, Head of other financial Institutions Supervision Department (OFUSD) at BoG, who was a Representative of the Governor of Bank of Ghana at the Rural Banking Excellence Awards disclosed that, the Central Bank of Ghana has initiated a risked-based supervision approach where supervisory resources are allocated to areas with the greatest risk.
“Such identifiable risk areas are subsequently addressed in the systematic manner based on priority. This approach increases the effectiveness of supervision through improving supervisory outcomes while also increasing efficiency through improved resource allocation and processes. The Bank through this approach is able to allocate resources to distress rural banks without compromising the safety and soundness of the entire banking sector.”
Mr. Yaw Sarpong
The Eastern Regional Minister, Hon. Seth Kwame Acheampong, urged Rural and Community Banks to provide financial support in the form of loans to farmers in their catchment areas to help finance their cultural activities. This in the long run will tend to boost the agricultural sector of the country and provide job opportunities for individuals in the rural areas.
Adding to what the Eastern Regional Minister said, the Omanahene of New Juaben traditional area Daasebre Kwaku Boateng III, who was a guest of honor, advised the Rural and Community banks to engage in Corporate Social responsibilities. He explained that this will attract indigenous customers and as well bring RCBs to the limelight.
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