Banks need to be more generous
Banks in the BVI need to be more generous as they consider loans from applicants in the territory Deputy Premier, Lorna Smith, said in the House of Assembly (HOA) recently.
Smith, who is also the Minister for Financial Services, Labour and Trade, echoed concerns highlighted by Opposition Leader Ronnie Skelton that banks were simply not doing enough to facilitate loans for persons who were most in need.
Skelton pointed out that this was especially true when considering the millions of dollars in deposits that were made into those institutions. Figures show that VP Bank, FirstCaribbean Bank and Republic Bank together, held deposits of nearly $1.5 billion up to the end of the first quarter of 2023 (up to March 30).
Smith said she has been holding meetings with the Bankers Association and was hoping to have an additional meeting with them next month after having two meetings recently. She emphasised that those meetings were not being done simply “for meeting’s sake”.
The Deputy Premier urged that, in instances where decision-makers from lending institutions are not in the BVI, they need to be brought into the territory. “I feel that we have gotten to a point where, if we want decisions taken, we are going to have the decision-makers from the banks come to the BVI,” Smith told lawmakers.
She made reference to the disparity highlighted by Skelton with the huge deposits being made into local banks and the minuscule loans that are being given out.
“This whole issue – the Leader of the Opposition asked me a question about the huge deposits compared to loans that were being given at the banks – and the banks, we would like for the banks to be more generous, if I may put it that way, in terms of the loans that they give,” Smith said.
She also agreed with Skelton that banks were repossessing homes and businesses, giving advantageous arrangements to others in the process. Smith promised that the issue is a point that she will raise with the Bankers Association once she meets with them again.
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Banks need to be careful with depositer’s money, not more generous. Banks also need to be staffed that people don’t have to waste an entire day to go to the bank for transactions which cannot be done online.
Banks repossess property when people don’t pay. A mortgage is a loan secured by real property, which the bank doesn’t want to hold onto. No mystery, and nothing to discuss.
NO No, we want action not just talk. The banks do not have a history of being generous especially these banks that have management here answering to these cruel people in the Caribbean who enforce their bank’s wicked policies that allow them to build their own economy.
You need to put laws in place to keep them in check. From the time the banks here had to be under and answer to offices in USVI,
Jamaica, Trinidad, etc it was downhill for the people here. Don’t talk about that one that just came in when they allowed that bank on our shores it was like allowing an epidemic allegedly.
Why should banks be generous? They lend depositors’s funds with the aim of earning a return. They aren’t an arm of the the government welfare department. It’s a contract to lend and borrow. If you can’t or won’t stick to its terms the loan will be called in.
One of the reasons banks may have got harder is because of the delays to realizing security which arise from having to give Belongers preference on the sale of real estate.
I think there used to be an exemption for sales on foreclosure but it was removed a few years ago. That has made the market less liquid so it takes the banks longer to realize their security. I would think that makes the banks more fussy about lending. This consequence was pointed out at the time; but ignored.
Banks are businesses just like other businesses, they don’t need to be more generous, they need to be more service oriented and efficient.
SHE IS STILL ON THE BANK OF ASIA’S BOARD?
….our politicians need to be less disingenuous.
The BVI banks are fine. Their uneducated BVI clients are the problem. Local education is now inadequate for banking customers. A competent BVI bank client needs off island higher education for 3-4 years in a 1st world country.
Lorna needs to look into why customers have to be standing outside of the bank in the hot sun?
Is saying)> as I said before I cannot perform miracles , and I ain’t no scapegoat , am trying my best with who and what I have to work with / so po8nt your dirty fingers elsewhere ( thank U
Kick out those banks that are not offering housing loans to locals. They make all this money in the BVI on other things. We need local people to be able to build they own home.
All these land giveaways will kill us if we can not get funds to build. The government needs to get involved, and bust some heads.
We just have the people that already have money building apartment buildings. This just brings in temporary workers that fill up communities. We need people that own they own home to build our communities.
This will make for a stronger BVI!
Lorna shut up cause u aint either …..u failed us
Why doesn’t she tell her brothers to be more generous with their Medical Facilities and Supermarkets? I know, they will say these are businesses, well so are banks!
…how our very own National Bank is never touted as a solution, why is this? This is the one bank that Government has any control over, yet it’s never mentioned. There is more to this than meets the eye!
Yo estoy tratando de el banco me el préstamo y después me disen q califica me los niegan tengo yo mi esposa un buen trabajo y ya hisimo la cinterna muro de protección pusimos parede hisimos sapata y hemos hecho muchos de la cuenta . Pero los banco trabajan por caritas . La ministra debe ponerle asunto por q ellos están abusado .
I agree the banks are not in the business for generosity, the banks are actually legal loan sharks that were granted license to operate legally in any country under specified LAWS, SO WHATEVER THESE BANKS ARE DOING OR NOT DOING LIES ON THE government. Do people realize what ever amount we borrow from a bank here you pay the same amount back in interest. borrow 50,000 interest at the end amounts to 50,000 and yes the politicians gets better rates. The end result nothings changes Sad……..
Sadly, the reality, is, banks are not in the risk business, that’s the business of insurance companies. If the government wants banks to take more risk, guarantee the loans if they become delinquent, simple as that. It’s easy to be generous with someone else’s money. Unfortunately, if the banks spent money like the BVI government does, they would likely go bankrupt.
I’m not sure many understand how to build a nation. Banking in BVI is a waste, many should take their money and look for better investments. The young should invest in land and housing, farming and construction and production generated business like fishing and manufacturing.
Government should be the one to give 90% of the start up money.
So BVI government say Bank’s should make (home mortgage) loans easier to qualify for. What could possibly go wrong. I worked as an internal loan reviewer at Bank of Boston during the early 2000’s. The US government created relaxed credit standards creating “more home owners and wealth” via no or nominal down payment / no ability to ORDERLY REPAY the loan (ie no skin in the game) & no or nominal previous loan repayment history etc. We called these loans “grants” which don’t have to be repaid based on “pie in the sky” cash flow projection models: ie 1st time Borrower applies for a 3 family home and ability to service debt (repay) is based on assumption that Borrower lives on 1st floor unit and can only afford a fraction of gross monthly principal – interest (The Nut) based on actual personal monthly income. Well the US Government waived a wand (ie diluted credit standards) and instructed Bank’s to factor rent from 2nd-3rd floors tenants (not co-signers) to make the monthly Nut. Credit approval was based on all floors would be 100% occupied for the life of the loan (15, 20 or 30 years). Mind you, the “borrowers” had no or poor credit and no ability to pay on their loan in the event the 2nd – 3rd floor tenants vacated or just stopped paying rent. Many many Banks subsequently went out of business due losses on vombie loans. I had a political cartoon on my cube wall showing a couple opening a bank account and the Banker saying ” Open an account and we will give you a free (failed) Bank.’ That’s what actually happened.
Overlending is a crime in the real world, selling big mortgages a customer cant afford creates a debt trap and is unsustainable, many US Banks have been fined for being more lenient on loans. There are set debt to income ratios which protect all parties.The National Bank gets around this by ‘rescheduling’ non performing loans and injecting taxpayers money as share capital