Despite government offering a variety of initiatives to help borrowers struggling financially due to the impacts of the Covid-19 pandemic, Premier Dr. Natalio “Sowande” Wheatley told the House of Assembly last Thursday that his government is not considering forgiveness programmes for loans issued through the National Bank of the Virgin Islands.
In response to questions from Opposition Leader Julian Fraser, the premier said the bank has “the same conditions and regulations as all others in the territory” and must remain answerable to its shareholders.
Still, he said would explore whether there was anything more the bank could do to ease the pain for borrowers.
Dr. Wheatley explained that the bank offered payment moratoriums from March 2020 to March 2021, which “continue to be voted on a limited case-by-case basis.”
He added that the bank waived all late fees on loan payments from April 2020 to September 2021.
However, these measures were not without costs for the bank, Dr. Wheatley said, explaining that despite a “significant reduction in interest income” due to extending the moratorium period, the bank still had to pay the same amount in overhead, “which resulted in a net loss for that fiscal year.”
The bank still needs to recover its financial footing, he said.
“This government is not actively considering any forgiveness programme,” he said. “However, clients are given the opportunity to repay accrued interest without increasing their monthly payment obligations. Additionally, the National Bank of the Virgin Islands continues to work with clients on a case-by-case basis to provide loan restructuring options where feasible, to allow for easier debt service.”
‘Government-owned bank’
However, Mr. Fraser said that payment moratoriums, fee waivers and restructuring measures don’t go far enough and that as a government-owned bank, the NBVI could be doing more to provide relief.
He also compared debt forgiveness to government’s recent relaxation of stamp duty to facilitate buying and selling of land.
In the “same spirit,” he said, the government should consider providing debt relief to the bank customers.
“Those are our customers: This bank was the development bank of the Virgin Islands,” he said.
The premier responded that he sympathises with those who are experiencing financial difficulties.
“We want to ensure that moving forward that we’re responsible stewards of the people’s money, while at the same time seeking to find the balance in helping to bring relief to individuals in our community through well-thought-out and crafted initiatives,” he said.
However, he called these initiatives a balancing act with the territory’s fiscal obligations.
“They have their shareholders; of course, government is the main shareholder,” he said. “The bank, just based on the initiatives that we’ve described, they’re cognisant of what the society is going through, and they’ve made the overtures necessary and are taking the actions necessary to bring relief in many instances. And I promise to have a conversation with the banks to see if there’s anything more that can be done.”
But Mr. Fraser wasn’t satisfied with that response.
“Every operation has their shareholders,” he said, adding that in the bank’s case, “It just so happened that we are the shareholders.”