SVG

Eustace against FSA takeover of Building and Loan but advises against withdrawal

Prime Minister and Minister of Finance Dr. Ralph Gonsalves invested EC$21,000 in Building and Loan on behalf of one of his daughters on Monday. (Photo: Facebook)

Prime Minister and Minister of Finance Dr. Ralph Gonsalves invested EC$21,000 in Building and Loan on behalf of one of his daughters on Monday. (Photo: Facebook)

KINGSTOWN, St. Vincent, Feb. 6, IWN – Opposition Leader Arnhim Eustace on Tuesday said he does not like the idea of regulators managing the Building and Loan Association, but again urged against a run on the financial institution.

“I’ll be very frank with you, I don’t like the idea because I think this has to do with the whole issue of confidence and so on and how you deal with things. But, runs on an institution like this can often result in the institution folding up completely and many people losing everything there,” Eustace said on “Current Affairs” on Nice Radio.

“I am always cautious. Some people might say I am wrong, but I am always cautious about those things. And if they are handled properly you are not likely to have any significant run; and any problems they have in the institution, they are likely to correct them.”

The involvement of the Financial Services Authority (FSA) in the 72-year-old building society should give depositors more confidence, but this will depend on the FSA’s approach, Eustace said.

The FSA — the government agency that regulates non-commercial bank financial institution — on Friday announced that it had assumed management and control of Building and Loan.

The FSA’s intervention — in keeping with the law — came two weeks after a letter in The Vincentian newspaper by Luke Browne.

Browne, an economist involved in pension reform at the Ministry of Finance, expressed concerns about the management and financial health of Building and Loan.

He accused directors of the company of untoward actions and asked if Building and Loan was on the verge of collapse.

Reports say that millions of dollars were withdrawn from Building and Loan after Browne’s letter and reports by newspapers on the development.

I-Witness News understands that Building and Loan had offered depositors the option of forfeiting three months’ interest for immediate withdrawals of their investments.

Reports say that since the involvement of the FSA, Building and Loan has invoked a provision that requires depositors to give three months’ notice before they can withdraw their investments.

Meanwhile, Prime Minister Dr Ralph Gonsalves on Monday invested EC$21,000 (approximately) in Building and Loan on behalf of one of his daughters and encouraged Vincentians to also invest.

“I have absolute confidence that the FSA will function properly. They have the personnel themselves and they have other people they can bring to the table, including the consultants and the government — this government — will provide all the necessary support for the maintenance of the strength of that institution, which is vital to the financial system of this country,” Gonsalves, who is also Minister of Finance, told a press conference.

Eustace, a former prime minister and minister of finance, speaking separately on radio on Monday, said some Vincentians, bitten by the collapse of British American and CLICO are shy about investing in the financial sector.

“But, I maintain that I want to see the institution (Building and Loan) survive and prosper. And anything we can do to ensure that happens, I will tend to support that,” Eustace said.

The FSA on Wednesday said its involvement in Building and Loan “is not a permanent arrangement”.

It appealed for “calm and reasoned judgment on the part of all relevant parties at this time”.

“… reacting in panic to withdraw monies and close accounts is NOT helping the institution,” the FSA said.

Eustace said on Tuesday that the FSA’s involvement should give depositors confidence.

“I am not a person who recommends runs on institution. But I recognise the right of persons, within the present environment in St. Vincent, to take that decision if they want to do so. But I am not going to recommend that. I believe it is possible to pull back the institution…” Eustace said.

Follow our FeedFollow on FacebookFollow on Twitter

Advertisements

Discussion

4 thoughts on “Eustace against FSA takeover of Building and Loan but advises against withdrawal

  1. Someone tell me what kind of publicity stunt is the PM trying by investing $21,000.00 in Bldg.& Loan? I am wondering if he had any investments there before this fiasco.

    Posted by Eric Williams | February 6, 2013, 20:05
  2. I am confused here, help me out I Witness:
    “I-Witness News understands that Building and Loan had offered depositors the option of forfeiting three months’ interest for immediate withdrawals of their investments.

    Reports say that since the involvement of the FSA, Building and Loan has invoked a provision that requires depositors to give three months’ notice before they can withdraw their investments.”

    Posted by Tiblli | February 7, 2013, 12:06
  3. Tiblli,

    Just to clear it up so you wont be confuse read the following:

    “There system calculation is based on the account balance being multiplied by the number of days until the middle of the year multiplied by the percentage amount and divided by number of days in the year. The interest rates paid are determined by the balance on a/c as at end of period.

    With respect with withdrawals two separate interests are calculated then combined. The first one on the balance before the withdrawal using the appropriate rate, but “D” would be the amount of days that have already pass within the period and the second interest on the balance after the withdrawal using the appropriate and “D” being days left till end of period. Same rule applies for deposits (Additions to the original deposit).

    Any customer who withdraws monies from their account without giving the association 3 months notice will have to forfeit 3 months interest on the withdrawn amount as penalty using the following formula:

    This is there golden rule even before the FSA assumed control. But what i beleive is happening now is, they are honouring withdraws under 3 months.

    Posted by D Insider | February 7, 2013, 13:40
  4. I TOLD YOU SO, I TOLD YOU SO, I TOLD YOU SO, I TOLD YOU SO.

    I SAY BIG MANS MOTHER THAT WITHDREW THE MILLION.

    WELL ITS TRUE SHE DONE DID DO IT

    What’s my favorite word? B*******

    Why they gotta say it like $hort? B*******

    You know they can’t play on my court

    Can’t hang with the big dogs, stay on the porch

    Who blow the whistle?

    Who blow the whistle?

    Who blow the whistle?

    Who blow the whistle?

    Your mind is gone, your brain is blazed

    You’ve been wide awake for the last 3 days

    Poppin’ pills, it goes down for real

    Don’t stop, just keep rollin’ down hill

    Crash and burn, can’t stand, fall back

    You’re doin’ too much, you can’t handle all that Man, it’s been way too long

    Don’t walk in the garden at 4 am

    Less they say you do it again

    Who blow the whistle?

    Who blow the whistle?

    Who blow the whistle?

    Who blow the whistle?

    Do you really wanna be like me?

    Spit game like Snoop and TIP

    Pretty girls in the V.I.P

    They came with Dr, they don’t need I.D.

    Posted by Peter | February 11, 2013, 13:01

I-Witness News’ tweets

Archives

%d bloggers like this: