Rural Banks Assoc threatens legal action over lock-up funds

The Rural Banks Association is warning of potential legal action to recover GHS480 million that has been locked-up as a result of the collapse of certain financial institutions during the Bank of Ghana’s clean-up of the financial sector.

The Association’s members are facing difficulties as a result of the clean-up, with a substantial portion of their investments trapped in institutions such as NTHC, SIC Financial Limited, and Gold Coast Securities, all of which are regulated by the Securities and Exchange Commission (SEC). The President of the Association, Kwame Owusu Sekyere, expressed frustration over the situation and emphasized that appeals for the release of their investments are no longer sufficient. He stressed that the funds in question were invested after members had paid taxes, making it crucial for them to be repaid.

During an interview, the president highlighted the negative consequences of the locked-up investments, including the inability of members to fulfill their Corporate Social Responsibility initiatives in their designated areas. The Association is now stating its intention to take legal action against the relevant state institutions responsible for resolving this issue.

The president emphasized the urgency of the situation and the need for a prompt resolution in order for rural banks to resume their development activities in different communities.