Abokobi, (GAR), Oct. 18, GNA - The Bank of Ghana (BoG) on Saturday disclosed that the total assets of rural banks hits 976.895 billion cedis at the end of June, 2003 from a total of 205.5 billion in 1999. Total deposits mobilised stood at 739.179, whilst total credits channelled into the rural economy through rural/community banks stood at 273.909 billion cedis, the Reverend Joseph Akunyumu-Tetteh, Deputy Chief Manager, Banking Supervision Department of BoG said.

Rev. Akunyumu-Tetteh, who was addressing the 11th Annual General Meeting of Abokobi Area Rural Bank Limited at Abokobi said the impressive results are clear indications of the growing public confidence in the rural banking system.

He however, expressed concern about liquidity management, loan recovery, non-adherence to supervisory issues, and low minimum paid-up capital of some Rural/Community Banks.

He said BoG statistics indicate that some rural/community banks are not making serious efforts to increase their stated capital to the required level of 100 million.

These banks are operating with very low capital base, which does not provide them with the capacity to assume more credit risk. In fact, as June 30th, 2003, only 75, out of the 115 rural banks in the country had complied with the directive.

Rev. Akunyumu-Tetteh said as a result, BoG had directed that all banks that fall short of the required minimum capital should suspend payment of dividends to shareholders until they are able to raise their capital.

He also hinted that BoG had revised its directive on share acquisition by individuals and institutions in rural banks from 10 per cent and 30 per cent to 20 per cent and 50 per cent respectively.

The Deputy Manager, Bank of Ghana, however, commended the Abokobi Rural Bank for the enormous strides they have made and using prudent and modern financial practices, to compete favourable with other banks. He said, statistics on the bank indicate that between the end of May 2002 and end of May 2003, its total assets moved from 4.191 billion cedis to 6.449 billion cedis, an increase of 53.9 per cent.

Deposit went up from 3.320 billion cedis to 5.044 billion cedis, an increase of 51.9 per cent and investment in Treasury Bills moved from 2.769 billion cedis to 3.999 billion cedis, an increase of 44.4 per cent.

Rev. Akunyumu-Tetteh said the Bank's shareholders funds also rose from 672.470 million cedis to 967.309 million, an increase of 43.8 per cent.

Loans and advances increased from 777.067 million to 1.586 billion cedis, an increase of 104.1 per cent.

He said banking industry report on rural/community banks has classified the bank as among the satisfactory banks with a capital adequacy ratio of 55.73 percent.

He urged the Banks Board of Directors to maintain the high professional standard.

18 Oct. 2003