In view of recent happenings in the banking and finance sector which have led to some unfortunate regulatory shake-ups, rural and community banks (RCB’s) have been cautioned to position themselves to withstand the shocks of any possible regulatory reforms.
The Managing Director of ARB Apex Bank Limited, Kojo Mattah said: “The turbulence in the financial sector is enough history to guide all actors in the RCB sub-sector to do the necessary house-cleaning, before the central bank turns its attention on them”.
Despite some experts’ view that developments in the banking sector are due to countless factors, he stressed that laxity in the enforcement of prudential norms and blatant disregard of good corporate governance norms are the major factors.
In regard to this, ARB Apex Bank has initiated some pre-emptive operational measures to address peculiar issues pertaining to RCBs.
Additionally, some mandatory training regimes to help directors and managers of the RCBs fully appreciate the implications of their actions and indecisions have been introduced.
Mr. Mattah gave this advice at the 30th Annual General Meeting of the Nwabiagya Rural Bank. He further disclosed that, so far, about 100 rural banks out of 142 have met the new regulatory minimum capital requirement of GH¢1million while others are at various stages.
“While it is essential to advise the remaining RCBs to redouble their efforts to help them to meet the deadline set by regulators,” he said, “Nwabiagya Rural Bank was among the first RCBs to meet the requirement.
He particularly commended shareholders and the bank’s Board of Directors for increasing paid-up capital beyond the required minimum, since this will enable the bank to pursue some strategic initiatives.
“Having sufficient paid-up capital allows the bank enough latitude to venture into new sectors of the economy, as well as make a case for participation in major government initiatives such as the ‘One District, One Factory’ programme, Planting for Food and Jobs (PFJ) and the Youth in Afforestation Project (YAP).”
He further lauded the bank for posting a profit of GH¢4.7million for the 2017 financial year from a previous gain of GH¢4million recorded in 2016.
Kojo Mattah therefore urged the shareholders of the bank to continue investing, while also advising the Board of Directors to prudently manage the shareholders’ investment.