Money laundering big banking challenge - BoG

BY: Isaac Yeboah

The Bank of Ghana (BoG) says money laundering and terrorist financing have become a herculean challenge in the country’s economy, particularly in the banking sector.

Assistant Director at the Supervision Department of BoG, Daniel Ohene Kweku Owusu, made the observation at the launching of the 30th Anniversary of Lower Pra Rural Bank in Shama, at the weekend.

He said rural and community banks may be attractive to money launderers and terrorist financing due to perceived relatively weak internal control systems.

To curb these negative trends in the banking sector, he said, the BoG and Financial Intelligence Centre had issued guidelines to assist licensed financial institutions in designing and implementing their respective AML/CFT compliance programmes.

This, he said, was to ensure an improved monitoring surveillance regime to help minimize, detect and respond effectively to the threat of money laundering and terrorist financing.

He said, as a result, it was imperative for all relevant institutions, including rural and community banks to strictly implement the guidelines to ensure effective fight against money laundering and terrorist financing.

Mr. Owusu urged the management, board and staff of the bank to place high premium on good corporate governance and risk management and admonished them to forge a committed and united front, as well as rededicate themselves towards the objective of taking the bank to greater heights.

The Assistant Director of the BoG noted that the computerization drive embarked upon by rural and community banks had impacted positively on the competitiveness of rural banks in the banking industry. However, he indicated that it came with additional risks and new challenges, which could increase operational risks if not well managed.

To minimize the risk introduced by computerisation, Mr. Owusu stated that rural banks should put in place appropriate Information Technology security policies as well as adequate Disaster Recovery Plans to protect assets of the bank.

He said the number of rural banks in the country had increased to 139 and revolutionarised many micro and small-scale businesses providing credits, vital financial intermediation and other quality banking service.

He said it was worthy of note that Lower Pra Rural Bank’s paid-up capital stood at GH¢1.39 million as at the end of June 2013, which far exceeds the statutory minimum capital base requirement currently pegged at GH¢300,000 for rural banks.

The Chairman of the Board of Directors of the bank, Mr. Nathaniel Arthur, said the bank was established on August 13, 1983, and had chalked great successes with 13 agencies and three mobilization centres.

Some activities lined up for the 30th Anniversary included fun games, quiz competition, regatta, draught, radio talk show, cards among others.

Source: GNA