By Kofi Ahovi
More than 70% of the registered Rural and Community Banks (RCB) in the country have met the new minimum capital requirement, Business Week has gathered.
A total of 106 out of the 136 RCB have met the new minimum capital requirement set by the Bank of Ghana (BoG).
Checks at the Banking Supervision Department of the BoG indicate that only 30 of the registered rural banks are yet to fully meet the new requirements.
The new minimum capital requirements set in 2008, requires the rural banks to up their stated capital from GH¢50,000 to GH¢150,000. With the current development, it implies that the rural banking sector have shored up a total capital of GH¢15.9 million.
This is meant to strengthen the operational capital of the banks so that they do not depend on the central bank and customers.
The level of risks in the operational, liquidity and credit facilities of RCB necessitated the new requirements.
The capitalization requirement constitutes part of the central bank’s strategy to deepen the financial sector and support Ghana’s drive for accelerated growth.
Under the BOG’s requirement, Rural and Community Banks which fail to increase their capital base to Ghc150,000 will not be permitted to open agencies and pay dividends to its shareholders. Interestingly the central bank has not set any deadline for the RCBs to meet the new requirement.
Rural banks were first established in Ghana in 1976 to provide banking services to the rural population, providing credit to small-scale farmers and businesses and supporting development projects, with the first being in Agona Nyakrom in Central Region. The banks are locally owned and managed.
They are supervised by the clearing bank ARB Apex Bank under the regulation of the Bank of Ghana, which owns shares in the banks.
More than 70% of the registered Rural and Community Banks (RCB) in the country have met the new minimum capital requirement, Business Week has gathered.
A total of 106 out of the 136 RCB have met the new minimum capital requirement set by the Bank of Ghana (BoG).
Checks at the Banking Supervision Department of the BoG indicate that only 30 of the registered rural banks are yet to fully meet the new requirements.
The new minimum capital requirements set in 2008, requires the rural banks to up their stated capital from GH¢50,000 to GH¢150,000. With the current development, it implies that the rural banking sector have shored up a total capital of GH¢15.9 million.
This is meant to strengthen the operational capital of the banks so that they do not depend on the central bank and customers.
The level of risks in the operational, liquidity and credit facilities of RCB necessitated the new requirements.
The capitalization requirement constitutes part of the central bank’s strategy to deepen the financial sector and support Ghana’s drive for accelerated growth.
Under the BOG’s requirement, Rural and Community Banks which fail to increase their capital base to Ghc150,000 will not be permitted to open agencies and pay dividends to its shareholders. Interestingly the central bank has not set any deadline for the RCBs to meet the new requirement.
Rural banks were first established in Ghana in 1976 to provide banking services to the rural population, providing credit to small-scale farmers and businesses and supporting development projects, with the first being in Agona Nyakrom in Central Region. The banks are locally owned and managed.
They are supervised by the clearing bank ARB Apex Bank under the regulation of the Bank of Ghana, which owns shares in the banks.
Comments
Martin Gamah