The Board of Directors of the Caribbean Development Bank (CDB) has approved a loan of US$37 million to the Government of St. Vincent and the Grenadines.{{more}}

Approval for the financing was given at a meeting of the Board on July 22, 2010, a release from the CDB said.

These funds, which are the equivalent of approximately EC$100 million, will be used “to reduce the outstanding public sector debt at the National Commercial Bank (SVG) Limited (NCB), and to facilitate a restructuring of that institution.”

On Monday, Leader of the Opposition, Arnhim Eustace, said news of the loan is welcomed and should increase public confidence in the NCB.

Eustace was speaking on the New Times radio programme on Nice Radio.

“The Government of St. Vincent and the Grenadines has articulated a financial sector reform agenda that is designed to enhance the regulation and supervision of the country’s financial sector, with the ultimate objective of bringing the regulatory and supervisory functions in line with international best practices. As part of its reform programme, the Government proposes to reduce the public sector debt portfolio of NCB and transfer the public sector shareholding in NCB to the private sector,” the release said.

CDB’s financing will assist the government in carrying out this reform programme.

“The loan will permit a restoration of NCB’s liquidity position and an improvement in its asset quality, consistent with the Eastern Caribbean Central Bank’s prudential guidelines,” the release said.

While presenting the Estimates for the fiscal year 2010 on January 19, 2010, Prime Minister Ralph Gonsalves said the domestic portion of this country’s public debt stood at EC$588.86 million.

Prime Minister and Minister of Finance Dr Ralph Gonsalves was out of state at press time and could not be reached for comment.