Market is depressed and re-possessing assets, securities and properties will not give banks the best outcome – Rakesh Ram
With significant increase in risks, it is not the right time to reduce interest rate - Ram

Market is depressed and re-possessing assets, securities and properties will not give banks the best outcome – Rakesh Ram

With significant increase in risks, it is not the right time to reduce interest rate - Ram

By Dhanjay Deo
Wednesday 19/08/2020
HFC’s CEO Rakesh Ram

The Chairman of Association of Banks, Rakesh Ram says re-possessing assets, securities and properties of those customers who are unable to make loan repayments because of the COVID-19 pandemic will not give banks the best outcome as the market is still depressed.

Ram who is also HFC’s CEO says the scenario is unique as all commercial banks have been impacted and all have given loan deferments and their risks have significantly increased.

He confirms that $3.6 billion loan deferment has been provided by banks as at 31st July this year, and even at a best-case scenario of 10% default rate, it will result in $330 million of additional provision for doubtful debts.



He says the banks will have to weigh the options to get the best outcome for both the banks and the customers.

Ram says the worst-case scenario is that banks will have to start taking action to get the money back, but says he does not know when this will happen.

The Chairman of the Association of Banks says selling assets is not the banks intention and is not the core business however banks have to be mindful of the interests of its investors and shareholders and recovery action will be the last action and will only be exercised if all other remedial actions fail.

Ram says banks are also suffering and it also needs to protect its balance sheet and interest of shareholders and investors.

He confirms loans given by commercial banks are not insured.

Ram adds with banks absorbing substantial level of bad debts to its books and a significant increase in risk to its asset quality, it is not the right time to reduce interest rate on lending. He says the reality is that the banks will have a huge level of provision for bad debts.


Five Squares Gray Inn

Latest Videos

Stay tuned for the latest news on our radio stations

CFL radio frequencies
IN DEPTH
Public Consultation on Draft Media Bill
The new media legislation proposed by the coalition government is aiming to preserve the elements of media ownership regulation and registration ...
9 days ago

Proposed Tian Lun project at Nasese
Concerned residents are wondering why there was no publicity about such a huge project that will affect the environment along Queen Elizabeth ...
40 days ago

Leader of Opposition Voreqe Bainimarama suspended from parliament for 3 years
Leader of the Opposition, Voreqe Bainimarama has been suspended from Parliament for 3 years
43 days ago
FEATURE NEWS
Hong Kong 7s: Fiji 0 - South Africa 0
- Kick-off!...
3 minutes ago
LATEST NEWS
Fiji Airways resumes flights to Hong Kong
Fiji Airways this weekend resumed flights to Hong Kong after a hiatus of almost three years due to the COVID-19 pandemic. Tourism Fiji ...
1 hour ago

We have managed to achieve our goal from day one and two – Daugunu
As the Fiji Airways Men’s national 7s side prepares to play the quarter final of the Hong Kong 7s, Tevita Daugunu says they have managed to achieve ...
3 hours ago

Children take part in Palm Sunday service
Children and Christians around Fiji and the world are celebrating Palm Sunday today. Palm Sunday marks the triumphant entry of Jesus into ...
4 hours ago

Byrne impressed with how the Drua started against the Rebels
The way the Swire Shipping Fijian Drua started their match against the Rebels impressed coach Mick Byrne. The Drua scored two tries in the first ...
5 hours ago

Russia assumes UN Security Council presidency despite Ukrainian anger
Russia has taken the presidency of the UN Security Council despite Ukraine urging members to block the move. Each of the council's 15 members ...
6 hours ago

TOP