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PM suggests $15 million might not be enough to save BLA

KINGSTOWN, St. Vincent, March 29, IWN — The Eastern Caribbean Central Bank (ECCB) has approved a $15 million loan to the Government for the financially troubled Building and Loan Association (BLA).

Prime Minister Dr. Ralph Gonsalves made the announcement on Monday and gave the first indication that the money might not be enough to stabilise the 72-year-old building society.

Gonsalves said that before the Financial Services Authority (FSA) took over management and control of the BLA on Feb. 1, he had asked that the money be placed on standby ahead of the take-over, in case the money was needed.

“We may well need more than $15 million liquidity support but this is what I had lined up at that point for us to address that matter,” Gonsalves said.

Depositors withdrew $9 million ahead of the take-over, a repeat of a run in 2009.

Gonsalves told reporters that Trevor Braithwaite, deputy governor of the ECCB, informed him by letter that the Monetary Council had approved the loan.

The loan is for three years, with disbursements on a needs basis over six months.

It will attract a 2 per cent interest on a quarterly basis from date of first disbursement.

The principal is to be repaid in quarterly instalments over three years, including a one-year grace period from the date of first disbursement.

Quarterly payments towards the principal will be determined based on the amount disbursed, Gonsalves said.

“This is a matter of great importance to our financial system,” he said.

“… when there are individuals on boards and in management positions — managing financial institutions — and certain things are not done properly in order to protect the system, I have to be utilising money which I could be utilising elsewhere to maintain the stability of the financial system,” he further said.

He said people have raised issue of lawsuit against former managers of the collapsed British American Insurance Company.

“… but I don’t know if anybody has raised similar issues at a domestic level. That’s not for me to raise. That is for those who are keen on raising those issues,” Gonsalves said.

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Discussion

3 thoughts on “PM suggests $15 million might not be enough to save BLA

  1. WE HAD KNOWN THAT ALONG TIME TOO MANY PEOPLE TAKE THE BLA AND MAKE IT THEIR PERSONAL PIGGY BANK.

    Posted by Isola Ollie | March 30, 2013, 09:00
  2. Its time for the Government to tell the people the truth…THE BLA IS A FAILED INSTITUTION with no prospects of recovery. Bailing out the BLA is a waste of money, let it go, its over. The rich will suffer little or no consequences of this failure evident by the Prime Minister’s Mother withdraw of $1 million but the poor man with his two cents in BLA, well, good luck.

    But I suspect, Gonsalves will do everything in his power to save BLA, lawd knows he doesn’t want a repeat of the fiasco that was the sale of the National Bank; to come and tell people, it was a “master stroke” to sell BLA, will be just too much for even the most faithful of ULP supporters.

    What next institution is about to go belly-up? Agriculture has one foot in the grave; Tourism is prostituting itself to make ends meet; the Financial sector is being propped up by a sugar daddy call NIS BOND;Security is a fleeting illusion;Transport is at your own risk;Health Care is like playing Russian roulette;Culture is 10 days of fun in the July sun;the Legal system has been hijacked by politicians;Foreign affairs is in the hands of an errant-you talking to me-little boy..what else could go wrong in Vincyland? Has anyone read the National Sports Policy of the NDP, I will say no more.

    Lawd ah mercy pon Vincyland.

    Posted by Teacherfang (@Llijame) | April 1, 2013, 01:19
  3. As the minister of finance since 2001 Gonsalves has taken a great interest in BAL, he probably knows all about the finest detail of BAL, at least since 2007, his interest should of included who put large sums in, who took large sums out, he should know the finances inside out. If he says “We may well need more than $15 million liquidity support but this is what I had lined up at that point for us to address that matter.” He knows that as a fact, he has all the gen at his fingertips.

    What is a complete surprise to me is that he says he did not know his mothers money had been withdrawn, its not as if its a $100 dollars, or even a thousand dollars, its a million dollars. Seeing as he has kept such a close eye on BAL, how did that slip past him.

    I hate to go back to what he told us “I sometimes tell lies”, but I just can’t help myself, he himself sowed the seed.

    Its unfortunate, but since he told us he is a liar, I just cannot believe a word that he says or writes.

    Posted by peterbinose | April 1, 2013, 18:29

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