CAL Bank to introduce agency banking
Cal Bank Limited has initiated moves to introduce agency banking as part of measures to reach a lot of the unbanked population in the country.
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Agency banking is a retail or postal outlet contracted by a financial institution or a mobile network operator to process clients' transactions.
Unlike the bank, it is the owner or an employee of the retail outlet who conducts the transaction and sees to clients’ deposit, withdrawal and transfer funds, pays their bills, inquiries about an account balance, or receives government benefits or a direct deposit from their employer.
Short to long-term plan
The Executive Director of Cal Bank, Mr Philip Owiredu, announced this at the ‘Facts Behind the Figures’ programme in Accra last Wednesday.
According to him, the bank has a long-term plan of setting up a minimum of 1,000 agency banking, noting that it was cheaper to set up.
“It is not easy to set up the branch banks; so the bank has resolved to collaborate with the International Finance Corporation (IFC) to set up many of these agency banks in many parts of the country with the view to reaching a lot of the unbanked population,” he said.
Meanwhile, Mr Owiredu indicated that there were plans to train the agents who would be engaged by the company.
As part of the plans, the company had also taken measures to upgrade all of its systems across the country to serve customers better.
Performance
As against the first quarter of 2017, Mr Owiredu said, the profit of the company dipped from GH¢40,860 in 2016 to GH¢31,744 in 2017, an indication that the bank had to do more to increase its margins in 2017.
“Net interest income declined by 3.2 per cent year-on-year attributable to high cost of funds, while trading income also increased by 64.6 per cent due to increased trading volumes and volatilities in the local currency within the quarter,” he added.
On the bank’s assets, the executive director said it grew by 20.3 per cent, which was largely due to increased investment in government securities.
BDCs debts
The Assistant General Manager of the bank, Mr Charles Amoah, also said the Bank of Ghana (BoG) had directed all banks to classify loans owed by the Chamber of Bulk Oil Distributing Companies (BDCs) since the government’s efforts at paying the debts was waning.
“Out of the $383 million that the government said it was going to pay last year, about $200 million was paid by the Central Bank by issuing bonds for five years.
“Out of the balance left, the government made two payments after which no other payment has been made but there are currently ongoing discussions among all the stakeholders concerned to find a lasting solution to the issue,” he added.
For his part, the Managing Director of the Ghana Stock Exchange, Mr Kofi Yamoah, called for collaboration between the banks and telecommunication operators on the mobile banking system.
He was of the view that mobile banking should not be a competition but an opportunity to forge for more partnerships which would yield positive results and change the face of banking in the country in the long run.