ABSTRACT
The main purpose of the rural banking system is to supplant the traditional money-lender and to save the rural borrower from atrocious interest charges. The rural banks were set up because of the failure of the formal and informal financial institutions to meet the credit needs of the rural producers. For the rural dwellers, the problem of equity in the intermediation of credit in rural development under Structural Adjustment Programs and accusations of favoring the rural elites are two are some major complaints. The Structural Adjustment Program period derailed the plans for the further development of the rural banking system along the objectives originally conceived, and rapidly realized during the first period. In general, the Bank of Ghana guidelines and regulations are being flouted; no satisfactory liquidity ratios are maintained, the mandatory purchase of stocks is ignored and returns are not submitted on time.
