Executive Director of the Association of Rural Banks, Ghana, Comfort Owusu, has urged shareholders of rural banks to see the regulator’s directive to suspend payment of dividend as a good measure to sustain their investments and keep their banks in business.
According to her, the decision to suspend dividend payment is not the making of directors but a regulatory directive, and directors of rural banks cannot overturn it to satisfy any shareholder.
Ms. Owusu explained to shareholders that before one becomes a rural bank director, the person must own a substantial number of shares to qualify him/her to even put themself forward to be assessed and voted for – so, if dividend is declared they will also benefit; and so shareholders must be very patient because there are better days ahead.
However, when the central bank issued the directive for non-payment of dividend for 2019 and 2020, the Association immediately wrote to the Bank of Ghana urging it to consider rescinding that decision, since it is the only source of income for some of the shareholders.
According to the Association’s Executive Director, measures are being put in place to get the regulator to reconsider its stand on the matter.
Ms. Owusu gave this assurance to shareholders at the 38th Annual General Meeting of Atwima Kwanwoma Rural Bank Limited at Pakyi No2 recently. She however reiterated that the directive is also a strategic measure to use the dividend for strengthening the capital base of some smaller rural banks which had been badly hit by COVID-19 and the financial clean-up exercise.
She commended Atwima Kwanwoma Rural Bank for its support to the communities in which it operates. Ms. Owusu urged the bank to continue supporting the various communities, since it creates a good impact and boosts its corporate image.
For some time now, shareholders have had cause to complain because of non-payment of dividend; and many have disagreed with the directive, particularly, when the bank has made a lot of profit. The directors are equally unhappy when shareholders are registering their disappointment with the embargoed dividend payment.
B&FT’s checks indicate that directors of some rural banks, particularly those doing well and recording good profits, are in serious talks with the regulator to permit them to pay dividend because of their strong position in the business and their profit levels.