Business

Banks call on government to help retrieve locked up funds

Mrs Comfort Owusu, the Executive Director of the Association of Rural Banks Ghana, has called on government to support Rural and Commercial Banks (RCBs) to retrieve locked up funds with the defunct financial institutions whose licenses were revoked.

She appealed to government to consider a tax reduction from 25 per cent to 15 per cent and a tax holiday (2020-2021) to help strengthen the banks to mitigate the challenges they faced, especially during this COVID-19 pandemic.

Mrs Owusu made the appeal at the third edition of the webinar series of Krif Media Limited, publishers of Integrity Magazine, on the theme: “The Effects of Covid-19 on Corporate Ghana” with the focus on rural banks.

Dr Alex Asmah, the Chief Executive Officer of Amenfiman Rural Bank, said the time was ripe for government to consider a concessionary tax arrangement for the RCBs as part of the support.

He said such concession would strengthen them to better support the government’s financial inclusion agenda and the fight against extreme hunger and poverty post COVID-19.

Dr Asmah said at the initial stages of the restrictions, there were uncertainties about the future, so most rural and commercial banks switched to risk management mode mainly strategizing to survive the possible impact of the pandemic.

He said after building various risk scenarios the banks came out with strategies to support their customers whose businesses were impacted by the disease.

“It is worth noting that several rural banks have committed resources amounting to several thousand of Ghana cedis to support their communities and the Health Ministry in the form of cash and non-cash items such as PPE towards the fight against the pandemic,” he said.

Dr Asmah said interventions made to support clients in the farming and other sectors included moratoriums on loan repayments, deferment of monthly loan instalment and interest rate cuts from 150–200 basis points, far above the expectations of the Central Bank.

The Reverend Kennedy Okosun, Chief Executive Officer of Krif Ghana Limited and Krif Media, said the series focused on the impact of Covid-19 on rural banks and strategies adopted to mitigate them.

“Rural banks in Ghana have over the years played a very integral role in providing opportunities for microfinance clients, salaried workers, small and medium enterprises and the vast majority of Ghanaians who live outside of Accra,” he said.

He commended rural banks such as Fiaseman, Atwima Mponua, Amenfiman, Ahantaman, South Akyem, Juaben, Atwima Kwanwoma, Amansie West, Odotobri, Kintampo and Akuapem rural banks for consistently featuring in the Ghana Club 100 list for the last five years.

“These webinars create a platform for industry players, stakeholders and the public to redesign their corporate strategies, inform and educate businesses on the steps that will help them excel within this period,” Rev. Okosun said.

The next webinar was scheduled to take place on Tuesday, July 7, 2020 to focus on the “Effects of Covid-19 – The Insurance Industry.”

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