Finance Minister Colm Imbert has promised to look into the issue of deposit and saving rates charged by banks. He made the promise in winding up debate in the Senate on Tuesday in response to an earlier call from Independent Senator David Small.
In winding up the debate, Imbert said he had the authority to act on the issue by law and was “shocked” it was not a matter dealt with before.
“As far as I know, no previous Minister of Finance ever looked at this. Never looked at the fact that the Central Bank and the Minister of Finance can regulate the spread between deposit rates and lending rates and the fees and charges charged by... so that it’s in the law and I can tell you I have asked the Central Bank to start to initiate discussions with the banks on this.
“Because this is like a culture shock, eh, to the banks, that someone would come to them and say we are going to invoke Section 44A of the Central Bank Act.”
During earlier debate on Government’s mid-year review and variation of allocation, Small had said Government could assist the public’s “belt-tightening and saving effort” by asking banks to rectify the payment issue, since he believed institutions were “robbing” people in the current situation.
He said the depth of the problem facing Government was very deep and the options for dealing with that wee limited. “I’m not sure if everybody fully appreciates it...” Small said, adding while Government has been mandating “belt tightening” there was cynicism among the public.
Small, who suggested various ways to save costs, especially concerning ministries’ energy costs, also recommended how Government could help the public to tighten their “belts” and save.
Noting that Central Bank’s economic bulletin stated that the gap between deposit and savings rates is about eight per cent, Small said he understood Imbert had said recently that he had some leeway in the matter. Small added: “Every time we are asking the citizens — the Government is asking the citizens to bear with the Government and tighten your belt — well, give the citizens something.
“Tell the banks: this spread, eight per cent, is too high. You are robbing people.” Small said the Finance Minister should ask banks to do something “about this thing in the way in which citizens can get some benefit.”
Small said within Government’s own control, there “is something called Tax Free Savings Bonds. I have advocated for that in every session of Parliament. Where are they (bonds)? As a citizen I have zero ability for my savings to earn.”
Small added: “(So) while we ask citizens to tighten (belts), the Government can say, well perhaps we can help citizens save and earn something on their savings.”
Small also said in his contribution: “I challenge anyone to say that these (current times) are easy waters to navigate. These are, difficult, difficult waters.
“We need people to really stop the noise and let us focus on the issues and see how we can rally around T&T... we should recognise that these problems are so large that they require everybody to get behind the Government and try to see how we can best work together to ensure T&T is a sustainable feature... for everyone.”
Small added T&T also needed to figure out a way to deal with perpetrators of corruption “because that is going on here for too long.” He said he had said before that corruption did not exist in T&T since no-one had been prosecuted for this.
He added: “Clico, HCU (Hindu Credit Union), FCB IPO (First Citizens Bank Initial Public Offering), all of those things have gone silent. Nobody has been brought to bear, to face any sort of justice in this matter and things like repayment of HCU bonds is coming out of taxpayers’ money.
“But the perpetrators? Ask Allen Stanford and Raj Rajaratnam, what is the meaning of corruption. Because I understand right now they are very, very, well taken guests of the United States Department of Corrections... that is what you are supposed to do when you run a Ponzi scheme.”
Small added: “You rip off people and the Government has to stand in, come in and bail out but people are living fat in Florida and wherever, living well and there are no penalties. Noting the assets of foreign “perps” like Standford and Rajaratnam had been frozen also, he reiterated T&T needed to figure out a way to deal with similar situations.