According
to the Chief Executive Officer of Odotobri Rural Bank, the rising operational
cost, coupled with reduction in interest rate would put banks on in a tough
position to stay profitable.
He
observed hikes in prices of petroleum products, utility tariffs and increases
in taxes as some areas banks would have to contend with in balancing the
financial sheets.
The
Kumasi Metropolitan Assembly, for instance, has increased rates for Business
Operating Permit by 900 percent for GH¢1,000 to GH¢10,000 per annum, effective
2014.
“As
a bank our main duty is either to invest in money market instruments or to
lend; so when the money market instruments are coming down, automatically it
will trigger the interest rates down. At the same time operating cost is also
going up; fuel prices have gone up, taxes have been increased, now they are
introducing VAT into financial services; so 2014 would be challenging,”
expressed Mr. Ahmed.
Mr.
Ahmed believes the key instrument to staying in business should be operational
efficiency and effectiveness.
“We
have to reduce the waste to the barest minimum and some of the cost would also
have to be transferred to the client but we’ll make sure that it will not
affect them unduly,” he stated.
Meanwhile,
the Board of Odotobri Rural Bank has approved a scholarship package of Gh¢22,250
to 60 brilliant but needy students in some local communities in the Amansie
Central District of Ashanti.
The
bursary will help keep beneficiaries in school, from senior high to tertiary
institutions.
Story by Kofi Adu Domfeh
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