Rural banks have been urged to position themselves adequately to confront the challenges posed by the emerging technological advancement in the banking industry.
Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank, made the call in an address read for him at the sixth Annual General Meeting of
Bonzali Rural Bank at Kumbungu in the Tolon/Kumbungu District at the weekend.
The theme for the meeting was: "Reducing Poverty through Microfinance."
Mr Osei-Bonsu said in a bid to modernise the national payment system and banking supervision, the Bank of Ghana (BOG) had rolled out products,
among which were "E-Zwich", "E-FASS" and "Cheque Codeline Clearing/Automated Clearing House," for both the commercial and rural banks.
He said these services were geared towards making the payment system safe, efficient and fast, as well as enabling the BOG to exercise effective oversight responsibility over the banking industry.
In addition to these services, he said, the Apex Bank would soon migrate its star product, "Apex Link Money Transfer" onto an ICT platform to
make it efficient, fast, safe and secure.
Mr Osei-Bonsu told the meeting that all these innovations required heavy investment in information and communication technology and training and expressed the hope that Bonzali Rural Bank was bracing itself up for the new investment challenges that it would encounter as a result of its participation in these new developments.
He said: "One sure way of meeting these challenges is to increase the capital of the bank," and, therefore, implored the shareholders to acquire more shares to increase the capital base of the bank.
Mr Osei-Bonsu reiterated his call on rural and community banks to form co-operative mergers as a solution for their survival in the face of the "Changing, challenging, competitive and turbulent landscape" of the banking
industry.
"It is my hope that Bonzali will blaze the trail as the birthplace of the first merged rural and community banks in the country by becoming the
nucleus of a cluster of rural banks, which intend to merge in the Northern Region," he said.
The Managing Director of the Apex Bank expressed the need for effective risk management system to check the high incidence of fraud in the banking industry.
In his report, Alhaji Mahdi Abdulai Salifu, Chairman of the Board of Directors of the bank, said Bonzali Rural Bank made a GHC 150,921 profit
before tax in 2008, representing an increase of 18 per cent over the pre-tax profit of GHC 128,356 the bank made in 2007.
He said in spite of the world economic crunch, coupled with the high national inflation, which made deposit mobilisation difficult, "we were able to make these modest profits, suggesting that we can do better in good times"
Alhaji Salifu said the bank's main "susu" product, "Walma", was vigorously rolled out in 2007 and 2008 and had made significant
contributions to deposit mobilisation efforts of Bonzali.
He said microfinance, which had been the bank's "bread-winning" product, had been extended to all the agencies in Tamale, Yendi, Lamashegu
and Nyankpala.
He said the product now covered over 12,380 women beneficiaries as compared to 9,610 in 2007 and attributed this to the ability of the bank to
raise more funds from its internally-generated income and monies from government and donor sources.
The Board Chairman told the meeting that the bank had fully computerised the Tamale Agency under its computerisation programme started
in 2008.
Alhaji Salifu announced that the bank was currently accredited to the Millennium Development Authority (MiDA) project, which had undertaken to
computerise all rural and community banks.
The Board Chairman told the meeting that the Board did not recommend the payment of any cash dividends to the shareholders as the bank had to
transfer GHC 100,000 from its income surplus to its stated capital.
He explained that the Board took the decision in view of the BOG requirement that all rural and community banks increased their stated capital from the 2007 level of GHC 50,225 to at least, GHC 150,000 by December, 2008.
On its outlook for 2009, Alhaji Salifu said the bank would continue to pursue viable and beneficial programmes, including the completion of the bank's head office building at Kumbungu; the opening of new agencies and the continuation of its computerisation project.
He said the bank would also work towards increasing its profit from GHC150, 921 in 2008 to GHC 320,000 in 2009.
The Board Chairman announced that under the ARB Apex Bank rating, Bonzali throughout 2008, had been rated in the "Satisfactory" category among
the over 125 rural banks, adding: "Among the 14 rural banks in the three Northern Region, our bank was also rated the best in over 80 per cent of the
parameters used for assessing the banks."
In a speech read on his behalf, Mr Stephen Sumani Nayina, Northern Regional Minister, noted the significant contribution of Bonzali Rural Bank
towards poverty reduction in its catchment areas, especially through its microfinance credit scheme.
He gave the assurance that the Regional Coordinating Council would make every effort to support Bonzali to enhance its operations to be able to help accelerate the development of the North.