The President of the National Association of Rural Banks (NAB), His Worship Eric Danning, has raised urgent concerns regarding the significant sum of GH₵500 million in locked-up funds belonging to Rural and Community Banks (RCBs) in Ghana. His call comes amidst the recent release of approximately GH₵1.7 billion by GCB to individuals impacted by the financial sector cleanup. Danning’s advocacy underscores the pressing need for financial inclusivity and equitable treatment within the banking sector, particularly for rural banks that provide essential services to underserved communities across the nation. His frustration is palpable regarding the exclusion of RCBs from previous repayment agreements set by the Ministry of Finance and the Bank of Ghana, which he believes should rectify this oversight to bolster the viability of these banks.
At the backdrop of the 23rd Annual Conference of CEOs of RCBs held in Ho on October 17, 2024, Danning addressed the pressing financial challenges faced by RCBs, insisting that the release of the locked funds is pivotal for their operational functionality. He urged both the Ministry of Finance and the Bank of Ghana to revise their current arrangements to ensure RCBs are included in the financial recovery efforts. Acknowledging the critical role that RCBs play in the local economy, he argued that unlocking these funds would not only rejuvenate their business activities but also enhance their capacity to serve their communities more effectively and efficiently.
Danning’s statements also highlighted the necessity for transparency and prompt action regarding the release of these funds. He called on the relevant authorities to provide a clear timeline for disbursements, which would offer a much-needed lifeline to struggling RCBs. His plea reflects a broader concern within the sector, where many rural banks are experiencing operational strain due to lack of financial liquidity caused by the freezing of their assets. Through timely intervention, Danning believes that RCBs can return to their critical roles of fostering economic development and providing financial services to the rural populace.
The latter part of Danning’s address emphasized the security and operational efficiency of RCBs as essential pillars for their stability. He mentioned the need for concessional facilities from the ARB APEX Bank to enable RCBs to acquire armored vehicles, which would not only support their operational activities but also protect the assets and personnel involved in banking operations against potential threats. Such enhancements are vital in sustaining public confidence in the safety and efficiency of rural banking services. By prioritizing these needs, Danning argued, stakeholders would be contributing to the overall health and growth of the banking sector.
Moreover, Danning shed light on the hidden struggles faced by rural and community banks, suggesting that the ongoing challenges posed by locked-up funds have rendered these institutions unable to showcase their operational difficulties convincingly. This lack of visibility can lead to a disconnect between RCBs and their customers, potentially damaging trust and loyalty. He alerted stakeholders to the dire consequences of ignoring the plight of these financial institutions, acknowledging that consumers might resort to extreme measures if their funds remain inaccessible. By invoking the proverb “A stitch in time saves nine,” he emphasized the importance of preemptive action in resolving these challenges before they escalate into more severe ramifications.
In conclusion, Eric Danning’s advocacy for the release of the locked-up funds is not only a call for justice for RCBs but also a plea for the stability of the wider financial ecosystem in Ghana. By addressing the financial constraints and operational needs of rural banks, stakeholders can facilitate better service delivery to communities that rely heavily on these institutions for their financial needs. The prompt release of funds and implementation of supportive measures will strengthen RCBs, promote their survivability, and ultimately contribute to a more resilient and inclusive financial sector in Ghana.
