Banks continue to support customers, says Ram
THE banks will continue to support their customers in a responsible manner based on individual needs during this most difficult time, according to the Association of Banks in Fiji (ABIF) chairman Rakesh Ram.
He said customers should contact their relationship or branch managers to discuss their current financial position and mutually agree to action plan for mutual benefit.
“All the commercial banks have continued to assist customers who have been impacted by the pandemic either directly and indirectly.
“This hardship assistance, which commenced in mid of last year is still continuing and the Banks have voluntarily extended the hardship assistance till September 2021 on a case by case basis,” he said.
“This includes interest and principal repayment deferment, restructures and short-term funding for customers who are facing financial hardship during this most challenging time in our country’s history.”
The ABIF had welcomed the record liquidity levels in the market in a statement released on May 28, which confirmed Fiji’s strong banking and financial sector fundamentals.
“The banks continue to lend money to the viable and priority sectors and at acceptable financial costs despite the elevated credit risk in a most challenging business environment,” said Mr Ram.
“Based on RBF statistics, commercial banks new lending has increased to circa $2 billion as at April 2021 during the COVID environment.
“However, the banks’ average lending rates are on continuous decline.
“This is indeed encouraging in terms of supporting businesses meet their cost of borrowing and a clear confirmation that banks have been passing the benefit of reduced interest cost to the customers.”
He said banks had borrowed funds from their depositors to lend and therefore the banks have that underlying responsibility to ensure their funds were always protected by indulging in responsible lending activities.
The banks were also a commercial business and like any other business as Mr Ram said they had a significant impact on its operations and financial performance with a substantial increase in high risk loans.
“This has resulted in a huge increase in level of bad and doubtful provisions plus write-offs.
“The banks recognise that high level of lending losses has the potential to impact the regulatory capital adequacy of the banks.
“The RBF maintains a close supervisory oversight to ensure that all banks remain adequately capitalised in order to maintain Fiji’s financial system and economic stability.”