RCBs minimum capital up by 100%

The Bank of Ghana (BOG) has announced a 100 per cent hike in the minimum capital for operation by Rural Community Banks (RCBs). This has now been fixed at GH¢300,000.00, from the previous GH¢150,000.00. Mr. Franklin Belnye, Head of the Banking Supervision Department, said the modalities for compliance would soon be communicated through the ARB Apex Bank. Addressing the 25th annual general meeting of the shareholders of the Nwabiagya Rural Bank at Offinso, he noted that “adequately capitalized and profitable banks have the capacity to assume risk, expand their businesses and absorb possible losses arising from operations”. He encouraged the banks to continue growing their capital to serve as a bulwark against risk. Mr Belnye expressed satisfaction with the strong performance of the rural banking sector, whose assets stood at GH¢1.7 billion as at the end of the first half of this year. They had also mobilized GH¢1.27 billion in deposits, with their total investments growing to GH¢0.5 billion, and total loans granted to customers, hitting GH¢0.67 billion. He said this was proof of growing public confidence in the rural banking system, thanks to the good management practices. To help sustain and enhance good corporate governance in banks, the BOG has developed new corporate governance regulations, which would be applicable to all entities regulated by it. He mentioned some of its provisions as setting limits on tenure of directors, possession of certain competencies for directorship, opportunities for induction and training of directors, internal control, internal audit and compliance systems. Mr. Belnye said it must not be lost on anybody that through efficient and good banking practices, RCBs would achieve sustained profitability and create value for shareholders, customers and the community. He gave the Nwabiagya Rural Bank high marks for standing out as one of the high fliers and counseled eternal vigilance to prevent corporate failures by way of poor risk management, weak internal control systems and non-compliance with the BOG regulations.