The Bank Of Ghana (BOG) has expressed concern about reports of fraud and embezzlement in the country's banking system, especially by officials of rural and community banks.

According to the BOG, fraud has been identified as one of the potential factors that could precipitate the collapse of the banks.

Mr Dela Selormey, Chief Manager, Banking Supervision Department of the BOG, made this known at the Annual General Meeting (AGM) of shareholders of the South Akim Rural Bank at Nankese in the Suhum-Kraboa-Coaltar District in the Eastern Region on Saturday.

The BOG, he said, "is not happy when rural/community banks fail to investigate the backgrounds of their potential management employees from the Banking Supervision Department when considering their applications.

This, he said, leads to the re-cycling of such people with dubious character who are threats to the effective functioning of the banks.

Mr Selormey said the BOG required from the rural banks quick and prompt report on any malpractices by all manner of staff to the Department for quick investigations.

Additionally, names of management personnel being recruited should be submitted to the Banking Supervision Department for clearance before approval and final appointments are effected.

Mr Selormey said the BOG would continue to exercise its supervisory role over rural banks to further improve on their performances and ensure that public confidence in the system is maintained.

He further expressed concern about poor credit appraisal structures, unreliable feasibility reports on credit proposals and weak monitoring and supervision processes of rural banks.

The Chief Manager lamented that board members of rural banks who are supposed to be worthy examples, borrow money and fail to pay up when its is due and therefore warned board members to desist from such practices.

The Chairman of the Board of Directors, Opanyin Kwasi Gyasi, said the bank made a net profit after tax of 871 million cedis, last year, as compared to 377 million cedis the previous year.

Total assets, he said, increased from 7.56 billion cedis to 12.56 billion cedis during the same period, while its investment in government treasury bills amounted to 5.26 billion cedis.

Loans and advances increased from 1.78 billion cedis the previous year to 3.44 billion cedis this year, while the bank purchased Akuafo Cheques amounting to 4.20 billion cedis last year as compared to 700 million cedis in 2000.

The Chairman said the bank had proposed to pay 10.00 cedis per share as dividend to its customers.

He said the bank had been extending credit facilities to its organised customer groups to enable them to initiate profitable ventures.

It has also distributed five water pumps donated under the IFAD scheme to towns and villages under its catchment area.

Opanyin Gyasi said the bank had prepared a policy manual to guide the board and management on scholarship schemes, lending policies, staff policies and policy on donations.

On the proposed establishment of a senior secondary school at Nankese, the Chairman stressed the need for the district assembly, churches and Unit Committees of Town and Area Councils to study the proposal and submit recommendations.

The District Chief Executive for the area, Mr Michael Kofi Mensah, said banks have a vital role to play to assist the government to achieve its Golden Age of Business by mobilising resources to generate income and create wealth.

He commended the bank for its contributions towards the development of communities in its catchment area and pledged the district assembly's for it.