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Suruj: Banks are successful only if their customers are successful

Banks must remember that successful businesses and people are the cause of their high profitability. If people fail to be prosperous and if businesses fail banks and their shareholders will also suffer.

I am amazed that our banking sector appears not to understand the simple fact that they are successful only if their customers are successful. The banks in this country are not being as kind as they can be towards the people of this country. One can understand that banks like Scotia and Royal Bank of Canada do not really care. They are entities here to Make money not to be compassionate.

The Central Bank by making more money available to Banks to lend did not really deal with the cost of borrowing nor the ability of businesses in a depressed economy to borrow. Banks Are not compassionate and we will see a number of small businesses facing bankruptcy as well as persons losing their homes due to Job losses. People are now beginning to understand that deferrals of their loans mean additional interest and having to extend the life of their loans. In reality the people are not going to benefit from the central bank measures they have introduced.

If you speak to Small and medium size businesses you will hear that they are planning how to scale down operations. Job losses are on the rise whether we agree or not. Yet we have not heard from the government of any concrete plans to give financial support to vulnerable businesses.

I make bold to say that banks should be prepared to give up 25 percent of their profits in the form of interest rate reductions and deferrals without penalties. The banks cannot be forced to do this but the govt does hold serious investments in Republic Bank and First Citizens as well As the Unit Trust and other financial institutions carrying substantial mortgage portfolios. The government can start by indicating to these banks that they are expected to share the burden of readjustment especially where businesses are concerned. The partnership created with credit unions must now be extended to banks in which the government has interests.

People are also beginning to have problems paying their residential mortgages. The government must consider the creation of a fund at 1 to 2 percent to assist persons with mortgage payments. This might mean borrowing at low Interest rates on the international market and through its existing mortgage institutions assist persons whose mortgages are being called in by the private sector banks.

In a cash strapped situation in which the government has found itself ( though they Will deny such) the govt needs to take a hard look at its loan portfolio and seek to renegotiate the terms of these loans including interest reduction and principal and interest suspension at least for a year.

This is not in my view a time to look at GDP etc. This is a time to become cash sufficient and cash efficient. The people need to be protected from hunger and from bankruptcy.

The government needs to act NOW.

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