By: Fred Yaw SARPONG
fsarpong@theeventpr.com
A check at the Bank of Ghana
(BoG) indicates that Rural
and Community Banks
(RCBs) in the country are struggling
to raise the minimum capital
requirements required by the central
bank.
The central bank has instructed
RCBS in the country to raise its
minimum capital to a minimum of
GHc1 million (1,000,000,000 cedis) by
the end of December, 2017.
However, the regulator says
majority of the RCBs have not
been able to raise the amount as
the deadline approaches. The Daily
Express gathers that as at the end
November, about less than half of the
total 144 RCBs have been able to raise
the Ghc 1 million capital.
Meanwhile, as at August this year,
only 58 Rural and Community Banks
(RCB’s) had a paid-up capital of above
GH¢1million.
The Governor of the central bank,
Dr. Ernest Addison said recently at a
Monetary Policy Committee (MPC)
meeting with some journalists that a
number of the RCBs are yet to meet
the minimum capital requirements.
Despite this, the governor said
the BoG will be flexible in dealing
with the banks especially towards the
capital requirements.
“We will work with the rural
banks to strengthen the levels of
capitalization because it is very
important,” he added.
According to him, it is important to
the extent that central bank is allowing
them to take on depositor’s funds.
He pointed out that as a regulator;
its major concern is the low capital
level of the rural banks. “It is
something we must deal with,” he
added.
The governor believes that the
standard in the RCBs sector is going
down and that it does not give enough
evidence that the sector is improving.
Dr. Addison said in order to
continue playing a critical role in
supporting industrialization, it is
critical for RCBs to adopt strategies to
better understand the needs of small
enterprises in rural areas.
According to the National President
of the Association of Rural Banks
Ghana, Dr. Nana Akowuah Boamah,
currently there are 144 Rural and
Community Banks, with over 800
agencies spread mainly in rural
communities across the country
employing over 20,000 Ghanaians.
“As a matter of fact, we are
disputing the fact of what the central
bank is saying. However, I can assure
you that majority of the banks will
definitely meet the requirement before
the deadline, if not all the RCBs,” he
told the Daily Express.
Dr. Boamah however appealed
to the government and the Bank of
Ghana to take a second look at the
corporate tax paid by the RCBs, as
well as the deadline to meet a new
minimum capital.
He noted that if the BoG fails
to do something about the current
requirement, the sector will lose
potential investors because they may
be scared to invest in the RCBs sector.
He mentioned that a lot of them
are struggling even to pay dividends
to shareholders ever since they were
established.
A Recent report from the World
Bank stated that small assets base
RCBs are relatively small financial
institution with average share capital
of GHc130,526 (US$105,263), average
deposits of GHc2.3 million (US$1.77
million), and average assets of GHc3.8
million US$2.4 million.
fsarpong@theeventpr.com
A check at the Bank of Ghana
(BoG) indicates that Rural
and Community Banks
(RCBs) in the country are struggling
to raise the minimum capital
requirements required by the central
bank.
The central bank has instructed
RCBS in the country to raise its
minimum capital to a minimum of
GHc1 million (1,000,000,000 cedis) by
the end of December, 2017.
However, the regulator says
majority of the RCBs have not
been able to raise the amount as
the deadline approaches. The Daily
Express gathers that as at the end
November, about less than half of the
total 144 RCBs have been able to raise
the Ghc 1 million capital.
Meanwhile, as at August this year,
only 58 Rural and Community Banks
(RCB’s) had a paid-up capital of above
GH¢1million.
The Governor of the central bank,
Dr. Ernest Addison said recently at a
Monetary Policy Committee (MPC)
meeting with some journalists that a
number of the RCBs are yet to meet
the minimum capital requirements.
Despite this, the governor said
the BoG will be flexible in dealing
with the banks especially towards the
capital requirements.
“We will work with the rural
banks to strengthen the levels of
capitalization because it is very
important,” he added.
According to him, it is important to
the extent that central bank is allowing
them to take on depositor’s funds.
He pointed out that as a regulator;
its major concern is the low capital
level of the rural banks. “It is
something we must deal with,” he
added.
The governor believes that the
standard in the RCBs sector is going
down and that it does not give enough
evidence that the sector is improving.
Dr. Addison said in order to
continue playing a critical role in
supporting industrialization, it is
critical for RCBs to adopt strategies to
better understand the needs of small
enterprises in rural areas.
According to the National President
of the Association of Rural Banks
Ghana, Dr. Nana Akowuah Boamah,
currently there are 144 Rural and
Community Banks, with over 800
agencies spread mainly in rural
communities across the country
employing over 20,000 Ghanaians.
“As a matter of fact, we are
disputing the fact of what the central
bank is saying. However, I can assure
you that majority of the banks will
definitely meet the requirement before
the deadline, if not all the RCBs,” he
told the Daily Express.
Dr. Boamah however appealed
to the government and the Bank of
Ghana to take a second look at the
corporate tax paid by the RCBs, as
well as the deadline to meet a new
minimum capital.
He noted that if the BoG fails
to do something about the current
requirement, the sector will lose
potential investors because they may
be scared to invest in the RCBs sector.
He mentioned that a lot of them
are struggling even to pay dividends
to shareholders ever since they were
established.
A Recent report from the World
Bank stated that small assets base
RCBs are relatively small financial
institution with average share capital
of GHc130,526 (US$105,263), average
deposits of GHc2.3 million (US$1.77
million), and average assets of GHc3.8
million US$2.4 million.
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