Abstract:
The primary objective of the study was to critically assess the operational risk management
in Nwabiagya and Amansie Rural Banks. The study was descriptive and explanatory in
nature. Structured questionnaire was used in soliciting for primary data from staff of the
selected banks. Convenient sampling technique was used in selecting 90 staff in all. Data
analysis was conducted using frequencies, percentages, mean, standard deviation, and simple
linear regression model. The study concluded that, operational risk management practices
had a moderate correlation with the performance of rural banks. Holding all other things
constant, an improvement in the effectiveness of the risk mitigation measures, will lead to an
increase in the rural banks’ performance by 44.7%, and vice versa. The risk mitigation
measures used by the banks were establishing credit standards, deposit collections, staff
supervision and training on risk management, adoption of advanced technology, contingency
plans, collateral arrangement, security deposits, on-balance-sheet netting, diversifying
operations to reduce the impact of any single risk, and risk reporting. It was recommended
that, rural banks and even the entire banking industry should invest in advance technologies
that could be used to simulate decisions and know the potential outcome, and how that could
affect banking operations. For example, there could be software that would determine the
level of credit risk based on some well-defined client characteristics.
Description:
A Thesis in the Department of Accounting Studies, Faculty of Business Education,
Submitted to the School of Graduate Studies, University of Education, Winneba in
partial fulfillment of the requirements for the award of Master of Business
Administration ( Finance)
JUNE, 2017