A commercial bank has experienced credit growth in the power, telecoms and hotel sectors since July.
Russell de Mel, CEO/director NDB Bank (NDB) told this reporter that though in the first half of the year there had been inquiries, investors had however been afraid to chance their arm into fructifying such inquiries into actual investments.
“Those delays may have had been due to their expectations that in a falling interest rate regime, that interest rates would fall further, or due to the uncertainty in regard to the future of the island’s tax regime, in the backdrop of a sitting Taxation Commission,” he said.
Externally, the global recession, giving rise to a fall in demand would also have had played a part, de Mel, who had been with the bank since its inception in 1979, said.
But those hesitancies appear to have had now disappeared.
“At the time the bank was set up, there were subsidized interest schemes on offer for NDB which in turn could be lent to the investor,” he said.
“We did our appraisals and our lending, with hardly any loans going bad,” he said. That was an era where there was a hive of economic activity.
De Mel didn’t attribute the current slowing down of project finance due to the absence of such low cost funds.
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