Apex Bank warns bank directors over loans

BY: Michael Quaye
Mr Kojo Mattah
Mr Kojo Mattah

The management of the ARB Apex Bank has cautioned Rural and Community Banks (RCBs) to comply with the Bank of Ghana regulations on the granting of loans and other facilities to directors of those banks.

ARB Apex Bank, which oversees the activities of rural and community banks in Ghana, said directors of banks should be subjected to the strict regulatory processes before such facilities were granted to them.

The Managing Director of ARB Apex Bank, Mr Kojo Mattah, gave the caution at the 36th Annual General Meeting (AGM) of Nandom Rural Bank at Nandom in Upper West Region at the weekend.

The caution stem from the recent developments within the Ghanaian financial sector where some directors of private commercial banks are said to have squandered some GH¢610 million in loans they granted to themselves.

Those activities were said to have occasioned the financial insolvency of those banks, leading to their collapse by the Bank of Ghana.

“Banks must adhere to the Bank of Ghana regulations on the granting of facilities to directors of RCBs,” Mr Mattah said in a speech read on his behalf at the AGM.

“Serving directors who wish to take loans from their banks must go through the necessary approval processes from the Bank of Ghana before such facilities are disbursed,” he stressed.

He advised RCBs to deploy information communication technology (ICT) in their operations to make them modern and efficient in their service delivery and also help to counter activities of fraudsters.

Tightening internal controls

He urged the RCBs to “tighten their internal control processes to prevent unscrupulous persons from exploiting the weak systems to the disadvantage of the banks”.

“Key among the internal control breaches begin at the origination of account opening for new customers. We implore all RCBs to ensure that basic know-your-customer (KYC) requirements such as a verifiable physical address of the customer, valid identity card, passport-sized photographs, and correct signatures, are obtained at the account opening stage,” he said.

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Mr Mattah also urged banks to disengage internal audit staff from routine operations to ensure their independence.

“Again, we urge the banks to ensure that officers engaged for internal audit duties do not act as operations staff because this would gaurantee the independence of the internal audit staff,” he said.


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The Board Chairman of the Nandom Rural Bank, Mr Francis Kogh Beinpuo, announced a modest profit before tax of GH¢609,403 for 2017 – a decline as compared to the 2016 profit of GH¢1,059,941.

That notwithstanding, he said the bank’s total share capital had reached GH¢1,268,537 which exceeded the GH¢1 million minimum capital requirement for RCBs.
He said the bank increased its investment portfolio by 28.20 per cent in 2017, with the majority of the income generated from interest on investments.