BoG urges rural banks to implement policies to expedite financial inclusion
The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has encouraged rural and community banks (RCBs) to implement policies developed for the introduction of the country’s digital currency (e-cedi) to engender financial inclusion.
According to the governor, RCBs are critical drivers in stimulating financial inclusion, as they were conceptualised as a unique business model to enhance access to bank credit to those in the informal sector, especially, farmers and traders in rural areas.
Therefore, supporting the central bank in institutionalising the digital currency would not only help in extending the digitalisation agenda to the informal sector but also boost financial inclusion.
Dr Addison made those remarks at the 40th anniversary celebration of Akuapem Rural Bank Limited in the Eastern Region on Saturday, August 28.
The call on the rural banks to support the e-cedi and digitalisation agenda comes at a time that countries across the world are introducing digital currencies, with Ghana being among the leading African countries to enter the pilot phase.
The governor specifically said, RCBs were “envisaged as a unique business model where rural banks thrived based on community empowerment, community ownership and community participation in governance.”
He then underscored that “rural and community banks continue to be drivers for financial inclusion and socio-economic development in Ghana.”
The e-cedi, which is the first general-purpose central bank digital currency in Africa, is expected to complement and serve as a digital alternative to physical cash, in line with the government’s digital Ghana agenda.
With the trial phase of the e-cedi expected to be rolled out nationwide in September this year, he asked RCBs to “collaborate with the ARB Apex Bank to leverage the opportunities available with digitisation within the payment ecosystem.”
The roll-out would involve banks, payment providers, merchants, consumers and other stakeholders in the financial sector.
He noted that this would present an opportunity to build a robust, inclusive, competitive and sustainable financial sector.
It is to ensure the realisation of the cash-lite, e-payments and digitisation agenda, aimed at promoting the use of financial technology (Fintech), innovation and interoperability to stimulate economic growth.
READ ALSO: Bank Of Ghana To Pilot Digital Currency ‘E-Cedi’ As A Payment System
Call on stakeholders to support the e-cedi and digitalisation drive
Dr Addison called on players within the financial sector to also support the project, noting that developing a vibrant financial sector that is capable of harnessing financial resources available for growth and development required the commitment of all key stakeholders.
“The bank will continue to pursue policies and programmes aimed at improving the operational environment to build customer confidence and ensure the stability and soundness of the financial sector,” he said.
Comply fully with GH₵1million minimum capitalisation requirement
The BoG governor also urged RCBs to implement measures that have come following the clean-up exercise of the financial sector, which was embarked on by the central in 2017.
He urged the RBCs to “fully comply with the minimum capitalisation requirement of GH₵1million by the end of 2021 and maintain the increased capital unimpaired.”
In addition, the banks were asked to ensure that they comply with the Corporate Governance Directive and Risk Management Guideline that establishes sound corporate governance principles and best practices within the rural banking sector.
Meanwhile, the central bank has introduced the Online Regulatory Analytics Surveillance Systems (ORASS) to help streamline data collection, maintain dynamic corporate profiles on regulated financial institutions.
The system also helps in moving licensing and related authorisation onto an electronic platform without the need to physically visit the premises, thereby easing the supervisory and regulatory burden on financial institutions.
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