The ARB Apex Bank has cautioned rural and community banks (RCBs) against poor credit management, urging them to put in place measures to strengthen credit management to avert running into liquidity challenges and improve upon their profitability performance.
The Apex Bank says it has realised that credit management practices in RCBs have been largely weak. This it indicated, has resulted in a number of RCBs reporting high levels of non-performing loans.
“Statistics from the RCBs Performance Report at the end of March 2021 indicated that the rural banking industry recorded a Non-Performing Loan Ration of 11.77% which was significantly higher than the benchmark of 5%. Eighty-one banks recorded ratios above the benchmark,” Acting Managing Director of ARB Apex Bank, Alex Kwasi Awuah, has said.
Commenting on banking fraud, the Apex Bank Boss lamented that there have been many instances fraud occurrences in the operations of RCBs which were attributed largely to situations like non-adherence to account opening procedures, non-adherence to customer identification requirements in the money transfer business and abuse of the credit management process.
Other infractions he numerated include leakages in ‘susu’ deposit mobilization, deposit suppression by tellers, weaknesses in both inter-bank and inter-agency reconciliation activities, fraudulent withdrawals, abuse of the imprest management systems, withdrawals from dormant and deceased accounts among others.
He urged RCBs to ensure strict adherence to operational controls to reduce such occurrences to its barest minimum. Prompt and stringent punitive actions should be instituted to deter staff from perpetrating fraud, he added.
Mr. Awuah made these remarks in a speech read for him by the Ashanti Regional Manager of ARB Apex Bank, George K. Annor, at the 15th and 16th annual general meeting of Amantin and Kasei Community Bank held at Amantin in the Bono East Region.
According to him, the first phase of the much-anticipated Agency Banking project has been rolled out, expecting to sign up over 1,000 agents of Agency Bankers across the country, emphasizing that “it is expected to help rope in more unbanked and underserved members of the public into the digital and cash-lite banking revolution being championed by the government.”
“The Agency Banking is also expected to bring modern banking services to the doorsteps of the rural banker, who hitherto, felt shy to bank boldly with an RCB or felt excluded from modern and convenient banking methods,” he added.