Komenda (C/R), Nov. 27, GNA - The Managing Director of the ARB Apex Bank Limited, Mr Emmanuel Kwapong, on Saturday warned shareholders of Rural/Community Banks (RCBs) against the election of board members, whose activities would rather affect the banks negatively.

According to him, one of the critical issues facing the rural banking system was that of good corporate governance, and it was imperative to ensure that persons chosen as board of directors were well informed and ethical.

Mr Kwapong, who made the call in an address read for him at the 21st Annual General Meeting (AGM) of shareholders of the Akatakyiman Rural Bank at Komenda, noted that, it was only through persons with experience, skills, knowledge and management competencies that such banks could achieve their overall corporate objectives.

In this regard, he stressed that the election of board members, should therefore, solely be based on their "zeal and commitment to serve diligently and be very supportive of developmental projects and programmes", and not on favouritism and nepotism.

He enumerated several products introduced to enhance poverty eradication and wealth creation in the rural banking system, such as 'Apex Link and Home Cash' (efie ne fie) to encourage savings and enhance access to credit assistance and urged all shareholders and customers to avail themselves of the opportunities they offer.

Mr Kwapong, traced the bank's performance from 2003 to the year under review, and said although its current paid up capital of 130 million cedis, was higher than the minimum requirement of 100 million cedis stipulated by the Bank of Ghana for existing rural banks, it was "considerably lower" than the 500 million cedis prescribed for new rural banks.

He as a result, he tasked existing and potential shareholders to strive to acquire more shares to strengthen the bank's capital base to serve as a buffer against possible future crisis.

Mr Kwapong additionally, urged the bank's management to strengthen internal control mechanisms to minimize the risk and incidence of fraud, which had become the bane of RCBs.

He commended the bank for honouring its social responsibilities by donating a total of 8.6 million cedis during the year under review, and for its involvement in various micro-finance interventions, which he said, was the "surest way of improving living standards of rural dwellers".

The chairman of the board of directors, Mr Kofi Ackon-Annan, said during the year under review, the bank increased its investment in treasury bills from 1.2 billion cedis to 1.3 billion cedis and granted loans totalling 928 million cedis with 800 million cedis going to farmers and traders.

He said it however registered a profit before tax of 98 million cedis as against 131 million cedis the previous year, and attributed the situation to the decline in interest rates, and delayed repayment of loans granted.

Mr Ackon-Annan, therefore urged the defaulting beneficiaries to promptly repay the loans, and appealed to residents in the area to patronize a raffle targeted to raise 300 million cedis to enable the bank increase its revenue.

The board chairman said the bank was considering the introduction of two new products 'Obaatan Enyidado Savings and Church Development Account', to encourage parents to open accounts and save towards their children's future and to assist churches, respectively.

During an open forum, shareholders agreed to the board's proposal to hold its AGM biannually instead of annually, until its finances improved.