Tema, March 27, – Dr Daniel Osabutey, a Senior Lecturer at Accra Technical University, has thrown his support behind the Bank of Ghana (BoG) directive mandating all rural banks to convert into community banks by March 31, 2026.
He described the policy as a strategic intervention aimed at correcting structural deficiencies within the rural banking sub-sector while strengthening financial stability and rebuilding confidence in microfinance institutions.
Dr Osabutey explained that the directive would introduce stricter regulatory requirements, including enhanced capital thresholds, clearer ownership frameworks, and improved supervisory oversight, all of which were critical to mitigating systemic vulnerabilities and safeguarding depositor funds.
He noted that chronic undercapitalisation had been a recurring challenge for many rural banks and said the reform provided pragmatic pathways such as mergers, acquisitions, and supervised asset transfers to support weaker institutions.
According to him, the transition to community banks would deepen financial inclusion by establishing a more integrated banking architecture capable of serving both rural and urban populations, while also improving mobilisation of local savings and expanding credit access to micro, small and medium enterprises.
Dr Osabutey highlighted the requirement for at least 30 per cent community ownership as a key feature of the reform, saying it would enhance accountability and foster stronger trust between financial institutions and their host communities.
He further observed that the directive strengthened the role of ARB Apex Bank Limited as a centralised service provider, offering shared infrastructure such as liquidity management, digital banking platforms, and payment systems, which would reduce operational costs and improve efficiency across the sector.
He added that the consolidation and modernisation of rural banks would support more effective monetary policy transmission and accelerate digital transformation within the financial ecosystem.
However, Dr Osabutey cautioned that the transition could present operational and financial challenges, including difficulties in raising capital, restructuring ownership, and managing institutional integrations.
He warned that inadequate communication during the process could lead to temporary service disruptions and uncertainty among customers.
Dr Osabutey therefore called for a carefully phased implementation, backed by strong regulatory oversight from the Bank of Ghana, technical support from ARB Apex Bank, access to transitional financing, and transparent engagement with stakeholders to ensure a smooth transition.
GHBUSS
27 March 2026
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