Some shareholders of Rural Banks in the country have expressed dissatisfaction at a directive from the Bank of Ghana (BoG) to halt payment of dividends.
The Bank of Ghana gave the directive as part of measures to reduce the impact of the COVID-19 pandemic, the current economic challenges, and the impact of the Domestic Debt Exchange Programme (DDEP) on the financial sector.
The move is also aimed at building the capital adequacy ratio of banks and specialised-deposit taking institutions.
Reacting to the issue in an interview with Joy Business, the Executive Director of the Association of Rural Banks, Comfort Owusu said the situation has made investors and shareholders reluctant to invest in the sector due to the suspension of dividend.
She expressed worry that the current directive has created some uncertainty among shareholders who wish to increase investment in the Rural bank sector.
“Any bank that has to pay dividend will have to write for approval from the Bank of Ghana which they haven’t done so you could see the shareholders are really not happy because they were expecting that as long as the bank has been able to make some kind of profit, they should be able to get their dividends”, she disclosed.
Ms. Owusu stated that most Rural Banks have to go the extra mile to explain to investors and shareholders the need to obey the Bank of Ghana directives to avoid the sanctions.
“It’s not easy for us, we’re trying to calm them down for the fact that when things are good they will have their dividends”.
She is of the view that there is the need to intensify education and assure investors that the current economic situation faced are temporary.
She maintained that such education will build confidence among investors to be hopeful and look up to the future with confidence.
Source: Myjoyonline
