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A National Bank for National Development Print E-mail
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Written by Administrator   
Thursday, 02 May 2013 00:00

The Prime Minister announced during his quarterly press conference that the National Bank is well on its way to being formed. Already, a Board of Directors has been appointed to form part of the Bank. This will be chaired by Minister Joy Grant with Marion Palacio being the Vice Chair and members being Dylan Reneau, John Mencias, and Hector Sabido.  Jose Karim Marin has been given the nod to be the General Manager. According to the Prime minister, the bank’s board is comprised of well-rounded individuals with financial capabilities as well as knowledge in the area where the bank will be receiving its financing.

Initially, 20 million dollars will be the start up capital which will be made available for mortgage loans for public officers and teachers primarily, however, the PM noted that finances will also be made available for middle and low income persons. The finances will be derived from the Petro-Caribe Initiative, which currently sees the Government purchasing fuel from Venezuela but only a portion of the actual value is paid for the fuel, the difference is a deferred payment which is converted into a loan that pays 1% interest.

The bank is now in the process of recruiting staff to begin operations. When it does, it will starting the lending process which will see clients receiving loans at 6.5% interest rate on the reducing balance. This, says the Prime Minister, is enough for the bank to cover its operating expenses. But more than covering expenses, the bank’s main objective is to directly intervene in the market to apply downward pressure on lending institutions to reduce their lending rates. As it is there is at least one bank, Scotiabank which has announced that its lending rate will be 6.99%, proving that Government’s maneuver is already having an impact. But the bank will not be limited to only lending, as time goes on, it is expected that the bank will be accepting deposits turning it into a full-scale bank. The PM noted that while the bank will have a modest start it will definitely not finish modestly.