Rural and community banks (RCBs) must rethink their interest rate policies and adopt strategies that will enable them to attain high deposit mobilisation, Kwadwo Aye Kusi, Managing Director of ARB Apex Bank has said.
He said on the basis of rational economic thinking, higher savings interest rates were expected to lead to higher deposit balances
Mr. Kusi was speaking at the 30th annual general meeting of Kintampo Rural Bank at the weekend at Kintampo in the Brong-Ahafo Region.
In a speech read on his behalf, Mr. Kusi told the RCBs: “Review upwards the interest rates on savings to enable you raise more deposits.”
He said ARB Apex Bank exists to support the rural and community banks to realise their full potentials to contribute significantly to the socio-economic development of their catchment areas.
The ARB Apex Bank is a mini central bank in Ghana for the RCBs financed mainly through the Rural Financial Services Project (RFSP), which is a government of Ghana project to holistically address the operational bottlenecks of the rural financial sector with the aim of broadening and deepening financial intermediation in the rural areas.
Dr Samuel Donyina Ameyaw, chairman of the Board of Directors, said in his report that Kintampo Rural Bank made a net profit of GH¢1.01 million during the 2014 financial year but marks a 13.54 per cent shortfall of the 2013 figure of GH¢ 1.17 million.
The bank’s operating profit also decreased by 13.54 per cent from GH¢ 1.28 million in 2013 to GH¢ 1.11 million in 2014.
Dr Ameyaw said the net worth increased by 28.42 per cent to GH¢ 4,681,100 as at December, 2014, from GH¢ 3,645,134 in 2013.
He said the bank declared a net dividend of GH¢ 202,430.00 for the year under review, representing 25.81 per cent decrease of GH¢ 234,137.83 for 2013.
He explained the bank’s inability to record higher net profit and dividend was among factors such as the country’s unfavourable macro-economic environment in 2014 which brought about uncertainties and challenges for most businesses and households.
Dr Ameyaw said the bank maintained its consistent excellent performance and was adjudged the Best Rural Bank in Brong-Ahafo in the region’s category of the maiden edition of Rural/Community Bank’s excellence awards 2014, organised by the Association of Rural Banks-Ghana.
It was ranked among the top 10 performing RCBs in the country by the Apex Bank Monitoring and Evaluation Unit as at December 31, 2014.