Rural Banks Advised To Merge For Competition

Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank Limited, on Saturday advised Rural and Community Banks (RCBs) to merge to be able to survive the growing challenges and competition in the banking sector. �I would like to take this opportunity to re-echo my call on the RCBs to merge their banks to stay in business� Mr Osei-Bonsu told the 23rd Annual General Meting of the Weto Rural Bank at Kpeve.

He, therefore, urged the bank to take the lead to for a merger in the Volta Region. He said the RCBs needed to strengthen their capital bases to be able to make heavy investments in Information Communication Technology and training which are driving the sector currently or risk being liquidated.

According to Mr Osei-Bonsu, the RCBs have no options but to adopt the modernised national payment systems such as the E-Zwich, E-Fass, Cheque Codeline Clearing/Automated Clearing House (CCC/ACH) and the Apex Link Money Transfer Product. He also advised boards of directors of the RCBs to institute risk management policies to identify, assess, monitor and control risks.

Most RCBs including the Weto Rural Bank, he observed, had posted encouraging performances in recent times, a sign of growing public confidence in the rural banking system. He said they still had a lot to do by way of organisational and operational restructuring from manual to ICT intervention. Shareholders of the bank suggested to management to use dialogue and education rather than costly litigation to get loan defaulters to repay their loans.

They observed that some of the defaulters might be ignorant about the implications of the loans they took. They also advised management to be careful about the type of personnel they employed in order to protect then bank�s corporate image.