The Bank of Ghana (BoG) has rolled out a nationwide training programme for all board of directors and key management staff of rural banks on the new Companies Act 2019, Act 992, to make them fully aware of their responsibilities.

This is to help rural banks escape the traps that befell some universal banks that led to their collapse and the famous banking sector clean-up.

The act mandates rural banks, as receivers of deposits, to be registered first as limited liability companies, hence the need to be abreast of the legal implications.

The training is being conducted by a banking consultancy firm, the Millennium Financial Centre.

The training of the 144 rural banks in Ghana, which started with the Ashanti Region group in Kumasi yesterday, is being done on a regional basis.

Strengthening sector

The Head of Millennium Financial Centre, Nana Otuo Acheampong, said the act was to make the banking sector stronger, prevent any shortcomings in leadership and enable individuals assess the risk or otherwise before taking up appointments onto boards and managements of the banks.

Nana Acheampong, who is also a former board member of the Graphic Communications Group Limited (GCGL), said for instance, per the BoG Corporate Governance Directive for universal banks, board members were to attend school or training every year.

"There is no more business as usual. These are some of the measures to block all the loose ends and make the sector tight," he said, as he addressed the topic: “linking fundamental knowledge with practical application”.

"Until 2016, rural banks were not covered by this but since one needs to register as a limited liability company to receive deposits, everybody needs to adjust," he said.

Responsibilities

Nana Acheampong told the over 50 trainees that a key feature in the 411-page act, for instance, highlighted the right of members to attend and vote at general meetings, penalties for non-compliance, classification of shares and the legal nature of the shares.

It also defined among others, who a director was, share qualification of a director among others.

Dormant account

He cautioned rural banks to be guided by the new definition by the BoG on what a dormant account was.

The banking consultant said after 24 months of an inactive account, it was the responsibility of the bankers to call their clients to reactive the account, if that fails, the names should be published twice in a national daily newspaper.

"When all these fail, the money is then sent to the BoG for safe keeping," he said.

The act

The act establishes “the Office of the Registrar of Companies” which is an autonomous governmental body with perpetual succession.

It is set up to register and regulate businesses and corporate bodies operating in the country, and is similar in operation and function to the United Kingdom’s Companies House.