Shareholders of the Akrofuom Area Rural Bank in the Adansi South of the Ashanti Region have been compelled to convert their dividends from the last financial year into share capital to help the bank meet Bank of Ghana’s new Paid Up Capital requirement to enable it continue operation.
Early this year, the BoG increased the Paid Up Capital from GH¢150,000 to GH¢₵ 300,000 for rural banks.
Those already in operation whose threshold falls short of the new requirement are expected to raise the needed money before a date yet to be announced while newcomers are to pay the new capital in full before they can be allowed to operate.
According to the Board Chairman of the Akrofuom Area Rural Bank, Kwabena Appiah-Pinkrah, even with the conversion of the dividends into share capital, the bank would still have to canvas for more capital to meet the requirement.
In line with the new demands, key shareholders and board members are said to have pledged their support to raise the Paid Up Capital to about GH¢500,000 by December this year to meet any eventualities.
He said the myriad of challenges that confronted the banking industry affected deposit figures; dwindling investment incomes and reduction in the bank of Ghana’s prime rate and subsequently, reduction in the lending rates of banks could also not help increase the interest income on loans significantly.
In spite of the challenges, the bank increased its loan and advance portfolio by 25 per cent from GH¢ 713,927.31 in 2011 to GH¢1,086,555.13 in 2012 but it decreased last year to GH¢1,029,264.39.
Ironically, there was also increase in investment in treasury bills and other securities as well as the bank’s total assets.
The chairman told shareholders at its 15th annual general meeting that as part of the bank’s effort at expanding its frontiers it was helping the traditional leadership in three communities in the Adansi area to set up mobilisation centres.
The areas are Bondwesango, Sikaman and Apunyase.
Also, the bank is positioning itself to meet the current demands on the job market with the hiring of high level graduates from the universities and polytechnics.
Mr Appiah-Pinkrah commended workers of the bank for receiving the silver award at the 10th Ashanti Financial Services Excellence Awards organised last year.