Total assets of the country’s 139 rural and communities banks (RCBs) shot up to GH¢2.4billion in October, this year, representing a 17.8 percent growth over the previous year’s figure of GH ¢1.98billion.
Mr. Raymond Amanfu, Head, Other Financial Institutions Supervision Department, Bank of Ghana (BoG) who announced this, said these were funded mainly by deposits, borrowings and reserves.
He put the RCB sub-sector’s contribution to total assets of the banking industry at 3.4 percent.
He was addressing the 31st annual general meeting of the Atwima Mponua Rural Bank Limited at Toase.
Mr. Amanfu while saluting the banks for their tremendous contribution to the nation’s economic development through their intermediation activities, expressed discomfort with the high ratio of their non-performing loans.
This currently stands at 11.68 percent, something he describes “as quite worrying” and needs to be reduced.
He again raised concern about some major lapses that continued to occur in the operations of the RCBs, despite several initiatives taken to address them.
He cited opening agencies without the BoG’s approval, especially in the urban centres — often leading to the misuse of depositors’ funds.
Added to this, he said, were the poor management systems arising from poor documentation appraisal and monitoring, which have resulted in high non-performing ratios in many of the banks.
Mr. Amanfu again touched on the issue of directors granting credit to themselves at concessionary interest rates — a breach of the banking law; and he underlined the resolve of the BoG as regulator to make sure all licenced institutions operate within the rules and laws governing their operations.
“We will not tolerate violations of the laws, as offenders will be appropriately sanctioned.”
Mr. Benedict Kwasi Afrane, the Board Chairman, said despite the challenging business environment — inflation hitting 17 percent and matters compounded by the energy crisis — the bank was able to achieve a 15.14 percent growth.
Its deposits rose to GH¢24,218,236 from the previous total of GH¢21,034,045.He said at the same time, loans and advances went up from GH¢11,675,355 to GH¢12,733,238.There was also a significant increase in its investments — from GH¢5,449,388 to GH¢8,309,388.
Mr. Afrane announced a profit before tax of GH¢1,130,077 compared with the previous year’s figure of GH¢1,000,344 on its operations during the period.