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Bank of Ghana urges rural banks to adhere to good orporate governance

The Bank of Ghana (BoG) has commended Communities and Rural Banks (RCBs) in the country for gaining public confidence in the banking system. 
 BoG was happy that, the sector continues to make gains with impressive growth in assets and deposit and customer base on the well-tailored products and services. 
Total assets of the RCBs grew by 16.8% year-on-year from 1.85 billion Ghana cedis in March 2014 to 2.16 billion Ghana cedis in March 2015. It continues to 3.6% of total assets of the banking industry. 
Total deposits of RCBs stood at over 1,654 million cedis with total investments at 686.52 million cedis, whilst 787.73 million was granted as loans to customers. The amount according to BoG was granted to traders, farmers, small and medium-scale enterprises (SMEs) who could not have obtained finance from the traditional banks. 
The Deputy Governor of Bank of Ghana, Dr Abdul-Nashiru Issahaku who disclose this at the 9th Annual General Meeting of Bonzali rural Bank in Kumbungu commended Bonzali for maintaining its performance for the year 2014. 
Data from BoG according to Dr Abdul-Nashiru indicates that Bonzali total assets as at March this year was 17.23 million compared to 17.70 million last year. 
On the performance of some RCBs, BoG deputy governor attributed the recent failure of some RCBs to weak corporate governance, where board members compromise their oversight roles and allows breaches of regulations and ethical conducts to go unpunished.
Credit facilities to directors of RCBs or companies related to them Dr Abdul-Nashiru  said should be in compliance with sections 43,44 and  45 of the banking Act,2004(673). 
The BoG deputy governor urged board of directors of RBCs to upgrade their skills and knowledge in order to interrogate financial statements submitted to them by management. 
To enhance good corporate governance in banks, BoG has developed corporate governance regulations that will be applicable to all entities regulated by BoG. 
Some of the regulations include limits on tenure of directors, possession of certain competencies for directorship, the provision of opportunities for induction and training of directors, installation of good internal control audit among others.
 From one rural bank in 1976, Ghana now has 138 RCBs, according to bank of Ghana. 


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