PM calls on banks to review interest rates

Commercial banks operating here have been called on to take a look at their interest rates, and “be flexible”, in an effort to accommodate potential homeowners.{{more}}

The call was made by Prime Minister Dr Ralph Gonsalves, who said that his administration was providing people with land, which facilitates mortgages, and that the banks should consider playing their part in the process, with a reduction of interest rates.

The Prime Minister mentioned a stimulus program in St Lucia, undertaken by CIBC Firstcaribbean International Bank and the Bank of St Lucia. He questioned why similar initiatives could not be encouraged by these institutions here in St Vincent and the Grenadines, and other Windward Island countries.

“Now, I am very happy to see that in St Lucia, CIBC Firstcaribbean (International Bank) has decided to bring down their interest rates to 5.99% per annum, and that the Bank of St Lucia have gone down further to five per cent; I’ve seen that in the newspaper,” Gonsalves said.

“Now, that is part and parcel I’ve been advised, of a program of stimulus devised by the government of St Lucia, but the only money that is coming from the government of St Lucia is the stimulus from the duty free materials over the next 18-month period.”

“But you can do the stimulus in different ways,” he added.

“We have a very favourable mortgage market in the country; the banks cannot complain and the government is active in getting people to get land, which is important before you can build house; you can’t build house in the air.”

The prime Minister lamented that the banks are “still charging interest rates like the old days”, and said that he hoped shareholders at the Bank of St Vincent and the Grenadines, formerly National Commercial Bank, and other senior personnel can effect some change.

“They may not reduce it to five per cent, but you have to reduce it to something reasonable, and I’m hoping that we can exercise such influence and our shareholders there can exercise some influence.

“I have spoken to one manager already and the manager understands the point that I am making, but the one manager is not in a position to make a decision on his own and I am yet to speak to the other manager, but I am sure that the people in St Vincent and the Grenadines would think it an important exercise in job owning.”

I can’t legislate the lending rate; the market has to decide that, but we know, generally speaking, there are low interest rate regimes in the western world, so let us see what can happen there.

“I want to see the conditions of people’s lives improve,” Dr. Gonsalves added.(JJ)