28 September, 2023, 3:28 am Central - 21°C Rain

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.




fijivillage Straight Talk with Vijay Narayan
Latest Videos

Stay tuned for the latest news on our radio stations

CFL radio frequencies
FEATURE NEWS
EbayShop recruitment scam - 1700 complaints valued at around $3.6 million received so far
The total of number complaints received regarding the EbayShop recruitment scam by the Consumer Council of Fiji, Fijian Competition and Consumer Commi...
4 hours ago
LATEST NEWS
Urgent call for increased crime-prevention measures and patrols following increasing reports of break-ins at Bureta St and Levuka St in Samabula and Lami
An urgent call for increased crime-prevention measures and police patrols is being made by residents of Bureta Street and Levuka Street in Samabula ...
10 hours ago

“Violence Against Children In Fiji” report says opportunity and security are key drivers of child abuse
The recent launch of the “Violence Against Children In Fiji” report states that drivers of violence against children are a combination of factors ...
10 hours ago

Senior NFP member Priscilla Singh disagrees with the proposed Local Government Electoral Act
Senior National Federation Party member and former councillor of the Suva City Council, Priscilla Singh says she stands with her party on ...
10 hours ago

$250,000 refurbished Makoi Health Centre commissioned
About 32,000 people now have access to an improved health facility as the new waiting area and refurbished Makoi Health Centre has been ...
12 hours ago

70% of domestic violence cases occur in iTaukei families and 74% are in Christian families - Tabuya
Ten communities in the province of Tailevu have made a promise to protect women, girls and children from violence after they signed their commitment ...
12 hours ago
IN DEPTH
EBayShop Online Recruitment scam
The Consumer Council of Fiji has issued a public alert about a group of individuals running a deceptive pyramid scheme known as “EbayShop Online Recruitment.”
3 days ago

7 Grace Road Group executives declared prohibited immigrants in Fiji after decisions by the South Korean Government and a request by Interpol
7 Grace Road executives in Fiji have been declared prohibited immigrants by the Fijian Government, it has been made clear through government ...
3 days ago

Bainimarama and Qiliho’s trial
The trial of former Prime Minister Voreqe Bainimarama and suspended Commissioner of Police Sitiveni Qiliho begins
41 days ago

TOP