I can remember when there was a government savings bank in the old administration building. However, merchants who imported merchandise via St. Thomas had to make payment through the Virgin Islands National Bank in St. Thomas. Because of this situation, Tortola merchants would send thousands of dollars weekly or monthly by cargo boat captains who would transact all necessary business on their behalf.
Eventually, the VI National Bank, now Banco Popular, opened a branch here in Road Town in 1961. Barclays Bank, which is now FirstCaribbean, opened in 1965, followed by Scotiabank in 1967 and Chase Manhattan Bank in 1968. Then came First Bank and the Development Bank, now the National Bank of the VI.
While many of us can appreciate the service these banks have offered over the years, there are those of us who also realise that Virgin Islanders have been taken advantage of in many ways by these banks. They were assisted by present and past governments, which have failed to introduce and pass consumer protection legislation to properly regulate the banks.
Many of us are also aware of the various fees some banks are putting on poor people to maintain savings accounts or even to cash cheques. Another concern that I have is the exorbitant amount of collateral banks require when making loans to black VIslanders and the businesses they own. It is now time that the people of this territory demand better service and more respect from these institutions, especially the foreign-owned banks.
National Bank
The National Bank of the VI, which began service in 1980 as the Development Bank in order to assist VIslanders, was later converted to a limited company by the government. It was subsequently issued a full commercial licence in 2006 when it came under the regulations of the Financial Services Commission. The services it now offers are savings accounts, certificates of deposit, mortgages, and personal and commercial loans. The provision of additional services such as checking accounts is long overdue.
With this new licence, the original intent of development was curtailed. However, the developmental focus of the bank was not completely lost as one of the mandates was for government to invest a sum of money in the bank for a development portfolio, which would be used to make soft loans for development-type activities such as small businesses, fishing, farming and loans to first-time homeowners. I was unable to get a figure: However, it is my personal opinion that this investment should amount to at least $10 million over a four-to-five-year period. It is time for the bank to establish this development portfolio.
Land bank
In addition, I would like to suggest that the bank could eventually establish an investment portfolio which would invest in a land bank. This land bank would buy undeveloped tracks of land and properties up for foreclosure. It would then resell to VIslanders rather than letting our land and properties get away from the rightful owners.
The bank is a critical source of funding for small businesses, partnerships and sole traders. It is therefore imperative that the government invest the necessary money in the bank and that the bank be more aggressive in attracting clients. It should also improve its customer-service focus and offer better interest rates and more lenient terms on loans. In other words, it needs to be more competitive with the other commercial banks. However, it must not fail to aggressively collect its loans when overdue, and it must be prepared to renegotiate with customers during financial difficulties.
Millions in profits
Let us not forget that the other banks served us well during our early developmental years, but they have made millions in profits. However, today they need us more than we need them. To assist our bank, VIslanders must patronise it to put it in a position to increase its profits and in turn re-lend this money to VIslanders, thereby keeping millions of our own hard-earned money in the VI.
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