Rural and Community banks in the country continue to record impressive performances in assets and capital mobilization.
The banks loans and overdrafts also continue to increase, making them the leading players in micro, medium and small enterprise financing in the country.
Mr Franklin Belnye Deputy Head, Banking Supervision of the Bank of Ghana, who made this known, said total assets of rural banks as at December 2009 stood at GH�623.48 million.
Loans and overdrafts also stood at GH�262.58 million whiles deposits amounted to GH�455.58 million.
He was speaking at the 22nd Annual General Meeting (AGM) of shareholders of the Nwabiagya Rural Bank Limited at Barekese in the Ashanti region on Friday.
He said the bulwark of any good bank was its capital and that the stronger the base the better and therefore, asked the banks to increase their capital further, by transferring part of their income surplus to the paid up capital.
Mr Belnye noted that most of the rural banks remain under- capitalized and weak, which was hampering their capacity for effective financial intermediation, adding that, such could not continue forever and asked them to explore the possibilities of mergers with strong banks or risk being liquidated.
He expressed concern about the way and manner some of the rural banks engage in the financing of big ticket transactions, such as contractors and importers, and advised them to focus on meeting the financial service needs of the lower end of the market and avoid becoming like Commercial Banks.
He said some of the challenges facing the rural banks included, operational and reputation risks and asked Boards of Directors of the banks to ensure that their staff were trained and the appropriate systems and processes put in place to avoid such risks.
Mr Belnye commended the bank for being ranked among the top five rural banks in the Ashanti region and also demonstrating its social responsibilities, by providing scholarships to needy and brilliant students and other social amenities in its area of operation.
Nana Owusu Sarfo Anwona 11, Chairman of the Board of Directors of the Bank said the bank recorded pre-tax profit of GH�1,002,098 in 2009, representing an increase of 121 per cent as against GH� 586,225 recorded in December 2008.
He said the deposits of the bank increased from GH�11, 697,764 in 2008 to GH�14,851,617 in 2009 while investments also rose from GH�3,922,010 to GH�6,640,312 within that period.
Nana Anwona indicated that during the year under review, the bank's loans and advances to customers increased from GH�8,715,939 in 2008 to GH�9,159,209 in 2009, representing 66 per cent, while savings stood at GH�6,288,630.34 in 2009 representing 42.34 per cent.
He said during the 2009 fiscal year, the bank spent GH�38,783.50 in fulfillment of its social responsibilities, which included scholarships to wards of customers in second cycle schools and tertiary institutions, donations of television sets towards teachers' awards day in the Kumasi metropolis and the Atwima Nwabiagya District.
The Chairman said others were the construction of a Ward for the Urology Centre at Offinso, Acqua Privy Toilet for Fufuo and the provision of a Health Centre for Adankwame, all in the banks operational area.