Former BoG Deputy Governor predicts mergers of rural banks
Mr Emmanuel Asiedu-Mante, a former Deputy Governor of the Bank of Ghana, has said most rural banks should merge because of the new capital adequacy requirement and competition from the increasing number of universal banks.
“I think the Central Bank’s directive on minimum capital and the fierce competition on the Ghanaian banking scene will move the rural banks to consider merging as a means of survival,” he told journalists after the launch of his 327-paged book on rural banking in Ghana at the weekend.
The Bank of Ghana has pegged the new capital requirement for rural banks at GH¢150,000 but few of them have been able to meet the requirement.
There is, however, no fixed time for the banks to meet the requirement.
Mr Asiedu-Mante said an expanded operation emerging from increased capital base could transform most of the rural banks into strong and viable institutions.
His book titled: “Rural Banking in Ghana” is the first-ever textbook and reference book on rural banking practice in Ghana that seeks to provide guidance to bankers (both in training and practice).
The book details the financial intermediation role of the rural banks; credit management practices and challenges; security and operational issues; prudential supervision and causes of distress in rural banks and outlines the development roles expected of rural banks.
Mr Asiedu-Mante, currently the Board Chairman of Stanbic Bank, Ghana, said the strongest and the best managed rural banks could become the head office in the merged entity while the others became branches.
However, he said, a lot of work needed to be done to ensure that the mergers worked well, especially the education of stakeholders and getting the necessary consent of all.
Mr Kwesi Amissah-Arthur, Governor of the Central Bank, who chaired the function, noted the pioneering role played by the Bank of Ghana in nurturing rural banks to serve as catalysts in the communities they served.
Mr Asiedu-Mante served at the Bank of Ghana for about 38 years, during which time he gained considerable experience in rural banking activities and regulations.
He was the Chairman of the Bank of Ghana’s Transition Apex Steering Committee — a committee that saw the formation of the Apex body for rural banks in Ghana.