November 18, 2005

Dr. Gonsalves refutes Opposition claims

Prime Minister and Minister of Finance, Dr. Ralph Gonsalves has refuted Opposition claims that the Government flouted prudential guidelines when it obtained an EC$25 million loan from the National Commercial Bank, NCB, for road repairs recently.

Speaking at a rally of his ruling Unity Labour Party, ULP, at Campden Park on October 10, the Prime Minister revealed that the Leader of the Opposition had only cited the part of section 16 of the Banking Act which states that the lending of more than 15% of the bank’s unimpaired capital and reserves is prohibited, except with the approval of the Minister of Finance, after consultation with the East Caribbean Central Bank.

The Prime Minister referred to Section 16 (a) (iii) of the Act which states that the limitation shall not apply if the transaction represents loans to the Government.

“The NCB is liquid. The interest they are getting overseas is less than the 8.5% interest they are getting from Central Government. They make more money by lending to Central Government,” the Prime Minister asserted.