The Association of Rural Banks has also written to the government to exempt rural and community banks from the domestic debt exchange programme.
With over 40% of its investments in government’s bond, the association said the debt exchange programme could impact negatively on their operations.
In a letter addressed to the Finance Minister Ken Ofori-Atta, the association laments that about GHC460 million is still locked up with various fund management companies after the financial sector clean-up.
“The RCBs still have significant proportion of their funds amounting to GHC460 million locked up with various fund management companies after the completion of the financial sector reforms. All efforts to get the Securities and Exchange Commission (SEC) and other regulators to intervene to get the funds released to RCBs have so far not yielded any positive results.
“The RCBs have almost 40 percent of their total assets in government bonds amounting to GHC 753 million and this is considered as very significant. Any haircut or unilateral rescheduling of coupon payments would therefore, significantly affect the operations of the rural banks. it will mostly affect their liquidity and solvency position especially when these banks are already reeling under the current precarious economic situation facing the country,” the letter stated.
Below is a copy of the letter:
