Banks tighten screws

Issue No: 628; 26 March 2001

 
Commercial banks have continued to take tougher stand to recover their loans.

One commercial bank has asked its customers to refinance their loans for which the bank holds bills of sales. Another has already taken stringent measures to start recovering debts. Yet another bank has brought in specialists from other countries to ensure that its high exposure loans continue to be serviced. Another bank, the Bank of Hawaii is reportedly considering closing its Fiji offices.

The moves follow the rapid decline in the economy and the continuing loss of investor confidence in the nation in the wake of the Qarase regime's rejection of the Fiji Court of Appeal decision. Independent projections by business analysts and economists all point to a dreary picture of the economy. The worst hit sectors of the economy are tourism, manufacturing especially garment and footwear, building and construction, wholesale and retail trade, and sugar. Over the recent past, the greatest exposure of commercial banks was in the tourism sector. But with the tourism sector down, most hotels which were recently financed are in serious financial trouble. A recently opened hotel is also reportedly facing financial ruin.

Meanwhile, the Suva retailers Association has cried out at the high charges and fees levied by commercial banks. Media reports state the Retailers representative Himmat Lodhia as saying that the banks "continue to raise their charges and introduce new ones for the smallest errands." Lodhia also called for the regime Finance minister to wake up: "The Minister of Finance and the authorities should wake up and legislate some of the findings [of the Banking Inquiry report]." Lodhia and numerous members of his association are prominent supporters of the Qarase regime. Many ethnic Indian businessmen allegedly had financed the terrorist George Speight and his band to overthrow the People's Coalition Government.

The People's Coalition Government had frozen all bank fees and charges, had announced the establishment of a banking commission and a Banking Ombudsman, and was in the process of implementing the Banking Inquiry committee recommendations. The Qarase regime halted all these initiatives.

 

People's Coalition Government - Fiji Islands
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