Bank pulls back on lending to Govt workers
Republic Bank (Barbados) Limited has pulled back on its lending to Government workers, in response to the Government’s ongoing retrenchment programme, Company CEO Ian DeSouza has also indicated that the new policy is likely to remain in place for the next two months.
“ . . . [It] is a fact that once we became aware of what Government intended to do with respect to the layoffs, we did have to go onto our lending criteria and pull back on our lending to temporary Government employees, because certainly if you know that people are going to be laid off, you will not want to go and extend loans to those people.
“Now, as we understand it, this process is going to take place between January and March so that, by the time we get to March, there will be a clearer understanding as to where we are going and that will allow us then to revisit the lending criteria and resume landings to temporary Government employees,” he said.
DeSouza was speaking to the media as the bank launched its Financial Care Unit (FCU), within it retail banking division.
Its main aim is to provide “prompt, relevant and sound financial advice to borrowers” who might have been laid off and are having trouble meeting their financial obligations to the bank and other financial institutions.
He also revealed that the bank was working with it corporate and commercial partners to mitigate the financial turmoil associated with retrenchment.
“Companies themselves may experience problems.
“With 3,000 people being laid off, that is going to result in a contraction of the economy and with that [contraction], we will find that local businesses are going to experience a contraction of revenue and profitability.
“So on the corporate and commercial side of our business we are working very, very closely with our customers who may need to have their debt profiles adjusted and in similar fashion we will be doing things like consolidation, extending longer terms for repayment of loans and so on,” DeSouza said.
”We believe the establishment of this unit to be a good thing . . . . We believe that we have the experience and the knowledge to assist those persons who will, with the prospect of no immediate income, worry about their ability to service their financial obligations. The inability to continue servicing their debt was one of the main concerns voiced by the workers who were retrenched on Friday,” said Republic’s senior manager, risk retail and special credit unit, Carlos Brathwaithe.
He told the media that it was anticipated that the public, regardless of whether or not they were a customer of the bank, would call on the unit.
”The Financial Care Unit will be available to anyone desirous of utilizing, its services – our customers or not . . . . We will offer debt counseling, debt consolidation, and perhaps be able to structure even longer repayment periods in order to accommodate reduced income.
”We will be able to offer anyone utilizing the unit the guidance they might require with respect to the disposal of assets that will assist in reducing their debt and counseling as to how to better manage their expenses at this time,” Brathwaite added, while noting that the unit would assist the bank in taking early corrective action to mitigate the impact of layoffs on its loans portfolio.
Manager, Retail Services, Steven Jordan, in describing the initiative as a preemptive approach to assisting affected persons and the community as whole, revealed that the project will be under taken initially as a pilot, in the initial stages.
“We are proposing initially to run a pilot project for three month after which time, we will look at how beneficial it has been. [Then] we will make a determination as to how we may want to expand it into some of our other branches.
“My understanding is that we are also looking at the possibility of seeing if we can have it on our website as a point of contact,” he explained.
The FCU will be located at the bank’s flagship Broad Street branch and will have a dedicated number, which Jordan is urging persons to call and set up appointments.
“[This is] as apposed to walking in, given the nature of the whole exercise. You would want them to have an initial discussion so that when they come, they are ready to sit down and have a meaningful meeting.”