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Chamber president: Bank rates too high


The trinidad Guardian / President of the Chaguanas Chamber of Industry and Commerce (CCIC) Richie Sookhai, said he is deeply disturbed at the current state of the T&T economy and the negative effect on local businesses.

“As the national economy has continued to contract, businesses have been forced to adopt various strategies in order to cut costs, manage cash flow, and realign their operations in order to stay afloat,” he said.

“Under these present economic conditions revenue streams have become thinner and profits are declining.

“Yet, even as we have seen companies fail, we note that there are organisations that operate within the financial sector who continue to grow large profits, namely the commercial banks.”

Sookhai said the chamber is concerned about wide gap between deposit and lending rates. He said research showed, that interest rate spreads among commercial banks and perhaps other similar financial institutions are among the largest in countries that have open economies.

“We urge the banks to reflect and do something about this urgently,” he said.

Sookhai noted that Finance Minister Colm Imbert, in responding to a question from the Opposition gave an assurance in Parliament recently that he will ask the Central Bank to look into savings rates versus lending rates in order to manage the spread in an equitable way.

He said: “We are hopeful that this has been done. Banks in this country also need to look to revising their service charges which, in some cases, can be deemed ridiculous and exploitative.”

Sookhai said the fact that there have been no decreases in prime lending and overdraft rates might reflect a lack of interest by banks in adapting like other business organisations and sharing in the burden of adjustment in a very challenging economic environment.

He said commercial banks tend to increase their lending rates when the Central Bank’s repo rate rises.

He said: “There is some potential for this repo rate to increase further in the coming year due to anticipated actions of the United States Federal Reserve. It is also one of the many tools used to combat inflation.

“The commercial banks must realise that this economic recession is deepening and intensifying. People are losing their jobs and businesses are under immense stress. Citizens are under pressure to pay their loans, mortgages and credit cards.

“Therefore, we call on the banks to be much more sensitive and work with their clients for mutual interest and for the best development of our country and our people.”

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