NASSAU, BAHAMAS — Credit relief for borrowers who have suffered reduced income as a result of the COVID-19 pandemic will be assessed on a “case by case” basis, according to the Clearing Bank’s Association (CBA).
Kenrick Brathwaite, chairman of the Clearing Bank’s Association told Eyewitness News that banks were faced with a “new dynamic” as scores of workers particularly within the hotel sector remain out of work.
“Earlier this year the Central Bank had given a directive in terms of banks offering credit relief,” he said.
“No such directive has come since that point. All the banks are now looking at it on a case by case basis. Obviously hotel workers have been significantly impacted. I’m sure the Central Bank would have made its decision based on the belief that in six months we would be in a better position as a country.
Brathwaite said: “The hotel workers are now in a very precarious situation because they don’t really know when they are going back to work. That creates a new dynamic for the banks because whether we would have given them a mandatory six months relief or based on their request this is a very different environment or them.
“We are now talking about how we are going to treat them if they do not go back to work as initially scheduled.”
In March, the Central Bank of The Bahamas announced that it had arranged with domestic banks and credit unions to provide a three-month deferral against repayments on credit facilities for businesses and households that were negatively impacted by the COVID-19 pandemic.
At the time, the bank advised the accommodation would be revisited in June.
For his part, Andrew McGrath, RBC’s regional corporate communications manager told Eyewitness News, noted the bank will be assisting clients on a case-by-case basis once its deferral program ends on September 30.
Commonwealth Bank in a notice on its website has advised its customers that it will be extending its credit relief program – which ended August 31 – for persons who continue to experience reduced income due to the pandemic.
Brathwaite added: “There isn’t going to be a universal position on something like this or a wholesale waiver, it’s going to be on a case by case basis.”
“As a nation we don’t have a whole lot savings habits. Anytime there is a loss of income there is a challenge loan payments. This nation has an insatiable appetite for borrowing.
“As long as you lost your income you are going to struggle. The Central Bank had also given a directive the use of assistance payments to satisfy loan obligations. It had directed banks not to take assistance payments and use them to satisfy loan payments.”