The Bank of Ghana has declared at least 21 rural banks are strong and completely safe and 105 others have also been rated satisfactory stating categorically that all rural banks in the Western Region are completely safe.
The 21 banks rated strong and completely safe are Ahantaman, Fiaseman, and Nzema Manle in the Western Region, Mepe Area, Anlo and Weto from the Volta Region; Atwima Kwanwoma, Ahafo Ano, Otuasekan and Odotobri from the Ashanti Region; Microfin, Enyan Denkyira, Bawjiase Area and Odupon Kpehe in the Central Region; Mponve, South Akim, Mwapim, Kwahu Praso, Adonten and Dumpong in the Eastern Region and Kintampo in the Brong Ahafo Region.
Contrary to widespread fears among the banking public concerning distress levels in that financial intermediation industry segment, the bulk of the RCBs – 105 of them – are rated “satisfactory” by the ARB Apex Bank which means they are “fundamentally sound with modest correctible weaknesses” and so require only limited supervisory responses.
But at the other end of the spectrum there are four RCBs that are so deeply distressed that they are at “high risk of failure” and so need constant supervisory intervention. There are another 11 that are not rated because they did not submit their financial data for the last quarter of 2018, raising suspicion that they too are deeply troubled although their situations have not been confirmed due to dearth of current financial performance data.
In between the best performers and the worst there is another category, rated as fair, containing 20 RCBs as at the end of 2018 and yet another, rated marginal containing 11; both of those categories comprise RCBs with varying degrees of difficulties which however can be overcome albeit with strenuous effort.
As at the end of 2018, 24 of the 133 RCBs that did file their financial performance data on schedule, had failed to meet the GHc1 million minimum capital requirement, even after the extension of the deadline by the BoG. Similarly, 27 of them failed to achieve the minimum capital adequacy ratio of 10 percent.
Instructively though the industry average CAR was 16.97 percent which indicated that many RCBs currently have adequate capital.