Placing funds with commerical banks--Seek advise from ARB Apex Bank

THE Managing Director of the ARB Apex Bank, Mr Eric Osei-Bonsu, has advised Rural and Rural Community Banks (RCBs) to seek the consent of the ARB Apex Bank before putting their resources at the disposal of the commercial banks in the country in the name of profit.
“Such transactions could lock up your funds and when you need funds most, you cannot have access. In banking, liquidity is more important than profitability”, he stressed.
Mr Osei-Bonsu gave the advice at the Western Union Convention for Front Line Associates (FLA) and Supervisors in Accra.
The convention which brought together about 900 participants from the rural banking industry in the country, had the theme: “Bringing Western Union Money Transfer to the door steps of the Rural Communities-the Role of the Rural and Community Banks.”
It was aimed at identifying and addressing the challenges confronting the payment of Western Union Money Transfers for banks in the ARB Apex Bank network, to share ideas and update the operators on the current developments in the Western Union business as well as recognise and appreciate all operators whose efforts contributed to sustaining ARB Apex Bank’s relationship with Western Union.
Mr Osei-Bonsu said rural banks were established to mobilise funds to support rural development hence funds generated from the activities of the rural banks must be used to empower the rural dwellers.
He said volumes of the Western Union transactions in 2008 had increased significantly compared to 2008, adding that this would have a good impact on the banks.
Mr Osei-Bonsu said although the bank had 360 Western Union locations which constituted 50 per cent of the Western Union Agents in the country, it controlled only three and five per cent of the market share in 2008 and 2009 respectively.
Mr Bonsu stated that "with the rapid decrease in treasury bill rates, there is the urgent need to decrease our fee-based income to survive."
He said as part of the Apex Bank's resolve to support rural banks to be viable, sustainable and operate efficiently, " all rural banks would be supplied with cash on demand to pay Western Union transfers so as to ensure that customers of RCBs demand for cash are not interrupted by the payment of remittances.
Additionally, from March this year, the RCBs will take 80 per cent of the commission received on Western Union Money Transfer while the ARB Apex Bank takes 20 per cent, an upward adjustment from the previous 70 per cent for the RCBs.
Mr Osei-Bonsu urged the RCBs "to strengthen their relationship with the Apex Bank by bringing all their challenges and problems to the notice of the bank", since the bank existed for the needs of the RCBs.
The West Africa Regional Operations Manager of the Western Union, Mr Moussa Diarra in a presentation advised the FLAs to stick strictly to the laid-down procedures for the payment of the Western Union money transfers as any breach put the company's image on the line.
He said it was important that they complied with all the applicable Anti-Money Laundering laws in Ghana to curtail situations where mischievous characters would try to involve the money transfer agencies in fraudulent transactions.
On the type of identification needed to receive money, he said national identification documents from other countries other than passport should not be accepted stressing that "the only acceptable ID cards recognised by Western Union are government issued cards."
He expressed worry that about 80 per cent of the transactions in Ghana were not thoroughly checked before money was paid to recipients.
"Do not take risk in the payment of money to persons without proper identification", Mr Diarra emphasised.
The occasion was also used to reward 20 RCBs that had the biggest Western Union volumes. The Agona Rural Bank topped with five of its agencies picking up prizes followed by the La Community Bank and the Akwapim Rural Bank.

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