PHILIPSBURG–St. Maarten Bankers Association sat in a meeting with the Central Committee of Parliament in discussion of the banks further extending moratoriums to their consumers and other measures to ease the hardship faced in the community as a result of the COVID-19 pandemic.
Bankers Association Chairman Derek Downes was joined by member Garth Sherwood. Downes is General Managing Director of Windward Islands Bank (WIB) and Sherwood is the CIBC FirstCaribbean Country Manager.
In his opening remarks Downes said the banks have agreed to extend the moratoriums. Each bank will determine the basis on which it do so. In speaking for WIB he said the bank has decided to extend the moratoriums for another three months for all personal loan clients. All these clients would have to do is opt in to receive the moratorium. “We are creating a portal on our website. Clients can go on our website and indicate that they would like to participate in the moratorium for another three months,” said Downes. He said basic information for clients will be required when logging into the portal and this should all be done before a specific deadline. For WIB the moratorium will be extended for September, October and November for personal clients. For business clients the bank is offering the opportunity to participate in the moratorium, but these will be assessed on a case-by-case basis.
He said his account management team has already been in contact with clients to determine their desire for the moratorium and to provide information to such clients.
Downes mentioned measures the bank has taken to assist the community in his opening remarks. He said many businesses have been provided working capital assistance to “tide them over” during the difficult time. Loans have been restructured for individuals and commercial clients.
He also said the National Recovery Program Bureau (NRPB) in conjunction with the World Bank is introducing a medium-size-enterprise programme to assist individuals who may need help with their business. WIB is a partner in this programme.
In his opening remarks Sherwood said CIBC has taken a similar approach to WIB. “We have amended a number of payment arrangements, restructured facilities, provided working capital assistance and will continue to do so where applicable,” he said.
He said the extension of the moratorium is under consideration by the bank. The bank is finalising its second phase of the moratorium that was extended in March for a period of six months. The bank is also looking into ways to amend the moratorium and be more specific about the way in which assistance will be provided to clients.
He said that what was done initially was a “blanket approval” for anyone who wanted that assistance, whether it was for three months or six months. However, he said what will be done going forward will be to have meaningful discussion with the individuals who may need a continuation of the moratorium to ensure that the bank not only provides assistance where needed, but can provide the right type of assistance where required.
MP Angelique Romou of National Alliance (NA) said there are people who still do not understand how the moratorium works. She further requested an explanation from the Bankers Association on how the moratorium works.
Downes explained that in a case that the moratorium was granted for three months, the client will not have to make a loan payment for a three-month period. “What is key: those three months’ payments have to be paid at some point in time. … It means that those payments were deferred to be paid at another time,” he explained.
MP Claudius Buncamper of United St. Maarten Party (US Party), said many homes are being auctioned and questioned whether this was a result of COVID-19. Downes said the auctions of properties had been ongoing before the COVID period. He said that for WIB all auctions have been suspended, even though before COVID, and he has not yet discussed recommencing auctions.
MP George Pantophlet of NA questioned whether banks were allowed to issue overdraft facilities to government. Downes said that if the government approaches the bank requesting overdraft facilities this would be considered once the appropriate legal steps are in place. He noted that there are restrictions as to how the government can borrow.
MP Rolando Brison of United People’s (UP) party asked about the viability of the bankers association coming together to help government.
In his explanation, Downes said that in this is a type of consortium loan various banks, pension funds or insurance companies get together once they have agreed to the terms and conditions of the consortium loan. He said this has happened on several occasions in St. Maarten whereby banks have participated in such loans to assist government and pseudo-government entities. He said this includes bonds that were issued by the Harbour and Princess Juliana International Airport.
“Banks have participated in several consortium or bond issues that improve the infrastructure of St. Maarten, but what needs to happen is that the entity that’s looking to borrow money approach that agent or a lead organisation to raise the funding. The banks on the island are engaged in assisting government-owned entities on the island to improve the infrastructure, the operations and the like,” said Downes.