Banker appeals to government to channel assembly funds through rural banks
Posted on: 09-Oct-2012
Mr Franklin Belnye, Head of Banking Supervision of the Bank of Ghana, has appealed to the government to consider channeling funds meant for district assemblies through rural and community banks.
He said this would amount to some sort of “financial decentralization” and would shore-up decentralization of governance. Mr Belnye was speaking at the 17th Biennial General Meeting of the Association of Rural Banks in Ho on Friday. The meeting was on the theme: “Unleashing the Potentials of Rural Banks - the Role of Key Stakeholders”. Mr Belnye said the government, as a key stakeholder, was continuing to play remarkable roles in facilitating the growth and development of rural banks by channeling many small and micro business development programmes through those banks. He said the central bank was considering widening the shareholder base of rural banks to people outside their catchment areas as the crunch issue of capitalization became pressing.
Mr Belnye said the policy shift was warranted by exigencies of banking operations that demanded a higher capital level.
He said the current Ghc150,000 capital base, “without a specific timeline for compliance, cannot remain forever” and urged banks to initiate steps "on their own to address any capital challenges they face before they are pushed”.
He lauded the ARB Apex Bank for superintending rural banks out of the operational drudgeries of the early 80s, to the current status of matching mainstream banking institutions.
Mr Belnye said ARB Apex Bank should seek more funds for on-lending to the rural banks and also provide training for staff to enable them to operate professionally. He expressed concern about the entrenched tenure of some directors of rural banks that had led to unnecessary controversy in the banks.
Mr Henry Ford Kamel, Volta Regional Minister, commended rural banks in a speech read for him for supporting development in areas where they operated as part of their social responsibility. Mrs Rose E. Newman, President of the Association of Rural Banks, appealed to rural banks to consider mergers in the face of the need for higher capital for effective operation. She lauded the 27 banks listed in the Prestigious Club 100, especially the Ashanti Chapter of the Association of Rural Banks, from where 12 banks joined the club.