Fraud in the rural banking system have been made worse through the use of computers and the need to strengthen internal audit controls is now a requirement under incoming ARB Apex bye-laws.
Mr. Yaw Wiredu-Peprah, a director of ARB Apex Bank Limited, stated in Sunyani at the launch of the rural banking week celebration and the 10th biannual general meeting of the Brong-Ahafo Region chapter of the Association of Rural Banks.
He said some of the banks had weak boards of directors and the trend needed to change to make way for strong, motivated, dedicated and well educated boards.
The director, speaking on "Rural banking in Ghana and Brong-Ahafo Region," noted that poor conditions of service and poor calibre of staff must also change in view of the current trends including competition from commercial banks and ICT.
Mr. Wiredu-Peprah spoke about the small capital base of rural banks and stressed the need for them to conform to Bank of Ghana requirement of GHC 150,000 or no payment of dividends should be made.
He said the removal of Bank of Ghana approval for credits above GHC 2000 had given more flexibility in lending but cautioned that there was a risk and the banks needed to be careful with regard to the granting of huge credits.
"There is also the need for banks to consider managers, acquisitions to raise capital base so can be in a position to transact bigger businesses", the director said.
On rural banks in Brong-Ahafo Region, Mr. Wiredu-Peprah said most of them "are not pulling their weight leading to slips in most of the indicators."
He said fraud had been on the ascendancy and cited the Tano and Tano-Afigya rural banks that did not paint a good picture of the operations of rural banks in the region.
On the successes of the rural banking system, Mr. Wiredu-Peprah said the banks now totalled 123 in the country and constituted the largest banking network in Ghana with more than 560 banking offices.
The director said the system had offered employment opportunities to a sizeable number of the citizenry and exposed rural communities to banking as well as the provision of credit facilities to farmers, traders, small-scale industries, salaried workers, amongst others.
The banks have also adhered to corporate social responsibility in catchments areas in the provision of schools, street lights, sponsorship of brilliant but needy students in various institutions, Mr. Wiredu-Peprah added.
Mr. Kofi Bonsu Boakye Boateng, vice president of the Brong-Ahafo Region chapter of the Association of Rural Banks, expressed regret that responses from member banks to enquiries made indicated that all seemed not too well with the up-date status and authenticity of most of them.
As a result, he said, most banks have not been able to issue share certificates to shareholders in direct contravention of the Companies Code 1963 (Act 179) Section 53 (1) and (2).
Mr. Boateng noted with concern that some of the banks that had approved bonus shares for shareholders over the years had not allocated these shares to the qualified shareholders
He commended the Asutifi Rural Bank at Acherensua for adopting "a very simple procedure to allocate all bonus shares so far approved by its annual general meeting."
He appealed to board of directors and management teams of other banks to take a cue and update their share register, allocate bonus shares and issue appropriate share certificates to qualified shareholders.
Dr. Yaw Peprah-Agyemang, chairman of Capital Rural Bank Limited at Abesim, near Sunyani, noted with regret the lack of modern banking structures and technology of rural banks and called for their re-naming and re-branding as regional banks.
He suggested the review of the relationship between the rural banks and ARB Apex Bank as well as mergers, acquisitions and partnerships amongst the banks to make them more vibrant against the commercial banks.