Some Rural & Community Banks (RCBs), particularly those in the Ashanti Region, claim their GH¢100 million is locked up with the National Trust Holdings Company Limited (NTHC).
According to the directors of these rural banks, NTHC, which is a state-owned entity with SSNIT as its majority shareholder has failed to pay them their claims since the Security and Exchange Commission, SEC, revoked the licences of some 53 fund management companies.
These affected rural and community banks have argued that even though the operating licence of NTHC was not revoked by SEC, the firm has not been able to pay claims due their clients. They say the NTHC has not also been able to refund the principal amount or interests to the rural banks.
“The Securities and Exchange Commission (SEC) acted within its mandate of protecting investors and the integrity of the market after a successful deliberation with the government and authorized a partial bailout of up to GHS50,000 to all customers of the affected Fund Management Companies but ignored to act on the situation with NTHC that is equally and directly guilty of the same non-performance”.
“This decision to make this partial payment was predicated on the Government’s commitment to protecting its citizenry and its sensitivity to the plight of affected clients, compounded by the disruptive impact of the Covid-19 pandemic,” the directors noted.
Rural Banks in Ghana continue to stand the test of time and have worked in the interest of their customers and shareholders as per their legitimate mandate as banks operating in their communities and serving critical financial intermediation for a significant number of Ghanaians.
Citi Business News can confirm that none of the 145 rural banks in the country was closed down or had their licence revoked by the regulator because of insolvency or any corporate governance irregularities, as reportedly happened to some of the universal banks when the banking clean-up occurred recently.
The rural banks have raised serious concerns about their locked-up funds, a situation they say has affected their Capital Adequacy Ratio (CAR) and profitability levels.
They claimed that they would perform far better if their locked up funds were released to them.
Failed attempts and effects
According to the rural banks, several attempts to retrieve their locked up funds from NTHC have yielded no positive results.
They complain about decreases in income and their profitability, as well as falling Capital Adequacy Ratios.
These affected banks also say they are unable to lend enough to make enough profit to pay dividends to their shareholders.
Citi News’ checks at the NTHC also indicate that most of the rural banks have written to NTHC to demand their locked up investments, but all that have not yielded any desired results.
They are thus urging the government to intervene.