Gov’t to pay up to $70K yearly to subsidize Banco Popular operations on VG
Government has agreed to pay thousands of dollars in subsidies to Banco Popular for the next few years to ensure banking services are restored on Virgin Gorda.
Premier Andrew Fahie said those payments will be government’s investment in residents.
“I am not ashamed to say, for the next five years — not to exceed $70,000 a year to help defray the expenses — we [will] subsidize the bank in terms of certain operations,” Premier Fahie said during a recent community meeting on Virgin Gorda.
“Those were not small negotiations. Sometimes we were hitting some dead ends,” he noted.
And while referring to detractors who might complain about the amount being paid to the bank in subsidies, the Premier reminded residents that the former NDP administration agreed to pay a vastly larger amount during their controversial BVI Airways deal.
He said: “We have a plane missing for $7.2 million so what is $70,000 to invest in the people of Virgin Gorda? And that’s the maximum as our contribution — our subsidy to make sure that a bank opens in Virgin Gorda.”
Premier Fahie said the subsidy agreement with the banking institution will be reviewed after the five years.
In the meantime, Premier Fahie said talks are also underway on how to get modern banking facilities on the sister islands of Anegada and Jost Van Dyke.
Banco Popular is set to open its new branch on Virgin Gorda by August. It will be offering full-time banking services three days per week.
The island was left without a bank last year after Scotiabank closed its sister island branch to cut costs.
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We tax money so wat , they waste most
So how about just telling the bank that you provide banking to all or provide no banking. There are plenty of banks that can be contacted to replace them. It’s ridiculous to pay to have them provide services. By the way what the old party did does not make it ok for the newly elected party.
If that was the case scotia would not have
Left. Please name the banks that can come and replace Banco. Thanks
VG people pay taxes too
Works out to be about $ 20 per person on VG. Of course, BVI investors club could atone for their ruination of the yacht harbor from jacking up rents in VG yacht harbor which led to most businesses to leave by offering the bank discounted rent on their empty buildings.
I tired of this premier keep going back on what was done to justify what he is doing. Do things that make sense economically and socially and there wouldn’t be a need to justify based on the past.
See the comment above.
Why is banking services so difficult to establish in VG? Why does FSC give out Banking Licences if banks don’t have a physical presence in the economically viable islands like VG, Anegada and Jost Van Dyke? Tortola is not the only island in the BVI!
Why subsidized on a bank that has been established for so many years? Were the other banks offered this same thing as well? When the time come for Anegada and Jost Van Dyke would there be a need for subsidiary funds then too?
That’s why all the banks have closed. They are not making a profit. The banking business is not as simple as we all think. Do you know what it costs JUST to transport the money from Tortola to VG? There is more to it than just paying the rent
Businesses operate for profit. The bank is not a social service so if the Government needs them, they have to subsidize them. What’s shameful is that the Government is doing this for a private bank instead of establishing their own national bank over there. We do everything assbackwards here, what’s new.
This is a long over due and vital convenience service for the residents of Virgin Gorda; hopefully, Anegada and Jost Van Dyke will be getting at least some basic banking services in the near-term. For VG residents, it will avoid having to incur transportation and other cost to travel to Tortola to cash a cheque, make a deposit, apply for a loan………etc.
In addition to providing the available convenience of basic banking services, the service also provides for the physical security and safety of residents, especially businesses, ie, having the ability to deposit cash, cheques….etc overnight, minimizing the risk of carrying cash…..etc at home or at place of business. True, the service comes with an average $14K per year subsidy but it is a good investment for the public good. The investment averages out to a nominal $20-25 per person. ??? to all who participated in working up and out the mutually beneficial agreement.
@E. Leonard, take a look again, for it is not $70K over a 5 year period but $70K per year for a 5 year period for a total of $350K. $14K per year for 5 years would appear more reasonable. $70K seems a bit much. By the way, did the Premier’s statement makes it seems like $70K total?; “We have a plane missing for $7.2 million so what is $70,000 to invest in the people of Virgin Gorda? And that’s the maximum as our contribution — our subsidy to make sure that a bank opens in Virgin Gorda.” NDP is out of office so why every decision it seems come with a caveat about what NDP, In a cricket analogy, VIP is batting now do bat and lead. People elect VIP to lead and be a change agent.
Anyway, understand that it may be a normal business practice that each branch should be self supporting but with the VG branch in operation, will Banco Popular lose money in its overall VI operation? How about a likle corporate social responsibility——give back a likle to the community. Undoubtedly, VG, the epicenter of tourism activity in the VI, needs and deserves basic banking services. However,$70K per year in public subsidy to deliver 3 days per week services does not seem that attractive. Why the National Bank of VI cannot deliver these basic services and if no why not? What is the VINB mission and why is it in competition with the private sector? If it is needed, it should be able deliver basic services to VG and other sister islands.
$70,000 or bit less for this kinda business is good business especially in this day and age. If it was was once a month then I won’t agree but for a year? Come on people that’s a great deal.
Not to say that we dont need to offer banking services to all the sister islands, But this seems alot like putting rims on your side chick a rented car, when your wife need gas money.
How much money and or assistance is the government giving to National Bank, which they are one of only two shareholders.
Given $350k to a big bank in PR that more than likely will pack up and leave VG after we stop paying there rent doesnt sound like a good deal.
There has to be a smarter way to get banking services to the sister islands.
National Bank does not offer all the services required. Where is their ATM on Tortola? Can you apply for a credit card or a debit card from National Bank?
I understand Banking Business very well, An ATM and Night Drop can cost Banco Maybe $60k so they can give every one on VG a debit card and put in ATM for maybe $70k. Its going to cost another 40-50k a year to keep the ATM up and running.
There is no profit to be made at the branch level on VG, there is a possibility that fees and services will cover operating cost and rent. At Best Banco will break even with the $70k a year.
At the end of the 5 year agreement Banco is going to pack up and leave, and having failed to invest in OUR national bank we are just $350k poorer and still not in position to have good banking service to the sister islands.
If National Bank was/is incapable of providing a workable plan to government for mobile ATM/cash service to the other 3 islands, either it should be closed, or the CEO replaced.
You’ve proven the point! Why don’t they have these offerings?
Great deal for Virgin Gorda – small price to pay for security of persons looking to handle cash and payroll – the 70K will come back many fold.
Remember VG People pay taxes too. We have no problem
What ever you do to help the people of the BVI it is a problem. What an ungrateful place
I hope the bank is not profiting on the government. If there is a shortfall on the expenses to run the VG branch then fair enough but with them charging bank fees for everything these days i would have thought it could sustain itself.
So you telling me the BVI dont have its own bank that it can subsidize. Instead it rather do it with a foreign bank that operates for profit. Interesting
I’d say Government need to get another bank who willing to accept the cost. It’s time we in the BVI stop paying investors to invest and start finding investors to invest their own money for the opportunity
That’s about 2 jobs at $35,000 per person per year. So we down to 998 jobs to go.
You forget the speaker, the preacher, the bodyguards and the litter wardens.
The people in Tortola always think that something good is always too good for the people of Virgin Gorda. Premier the people of VG are with you. GREAT JOB!!!
That’s why the other banks left. Understand how the banking business work and what the cost of doing banking on an island is
The 7.2 mil is irrelevant to this particular dialogue. He must sell using clear analysis and statistics as much as he can. It would have been more beneficial to show the public that Virgin Gordians collectively will lose more than that amount annually by not having a bank there. Those of us who do not live on Virgin Gorda should not have anything negative to say about the 70K because we don’t have to go through that ourselves. By not having a bank they experienced
-Loss of wages
-Loss of revenue operating at reduced or no staff for some small businesses
-Transportation costs
-Time loss
Stop being so petty. The plane was a passing statement. He did went on to justify the action. Some of you just need to go sit down.
It was petty of him to mention it no matter how brief in the first place. He has done it before. Stop enabling him. People like you could lead others astray by simply not acknowledging the truth.
Most of these comments are uneducated and show a COMPLETE LACK OF BUSINESS SENSE. no wonder BVI having trouble. Go ahead keep blaming tourists, “down island”, WHITE FOLKS, and everything else for your problem. THE PROBLEM IS YOU BECAUSE YOU THINK YOU UNDERSTAND AND KNOW IT ALL, EVEN BANKING YOU THINK YOU KNOW BETTER THAN THE BANKS. PLEASE BE QUIET FOR ONCE AND LEARN FACTS BEFORE OPENING YOUR MOUTHS AGAIN.
SMH
NDP people would just love it if we could forget about the plane….