The Tribune

By SANCHESKA BROWN

Tribune Staff Reporter

sbrown@tribunemedia.net

THE BAHAMAS Development Bank yesterday denied assertions that the  bank was overlooking “delinquent loans” by members of the Progressive Liberal Party and that politics plays a role in the day-to-day operations of the financial institution.

BDB Managing Director Arinthia Komolafe said to imply that BDB “operates under the PLP cronyism philosophy ... taints the character of the hard-working professionals of this institution who value their integrity over and above partisan politics”.

Her comments came after Free National Movement Chairman Michael Pintard said “reported political interference into the daily operations of the Bahamas Development Bank has resulted in substantial financial losses to the Bahamian people”.

In a statement, Mr Pintard alleged that a company, part owned by a former PLP minister, borrowed $200,000 from the BDB “in order to mobilise its work on one of the dormitories at BAMSI” and “has yet to service the loan which now stands at approximately $250,000”.

Mr Pintard called on the government to explain the basis on which the loan was granted to the company and on what basis was it paid for the construction project despite being delinquent on their government loan.

In her statement, Mrs Komolafe said “concerns raised regarding the Bahamas Agriculture Marine and Science Institute (BAMSI) are better addressed by the relevant ministries and government agencies”. However, she said, “when it comes to clients’ honouring of their obligations to the BDB and the recovery of the Bahamian people’s funds, there are no sacred cows.

“This approach is applied consistently in the credit adjudication, delinquency and recovery processes. In the first instance, we seek to work with our clients to ensure that they meet their obligations but we will not hesitate to take legal action against individuals or companies as a last resort in accordance with established policies,” the statement said.

“This is evident in the significant increase in delinquent cases in litigation and recoveries over the last two years. Between the financial years 2012 to 2015 the Bank has effected a 115 per cent increase in litigation against non-performing accounts, including a 250 per cent increase in matters arriving to at least judgment status in the courts.

“All of these have been achieved in spite of the many constraints the Bank faces and the challenging economic environment.”

Mrs Komolafe said the challenges that have faced - and continue to face - the BDB are well documented and she has made “no secret of the urgent need for policy direction for the Bank, recapitalisation and amendments to the current legal framework”.

“It has also been stated on numerous occasions that the governance structure of the institution can be improved. That being said, since taking on the role of Managing Director of the Bank, we have made the difficult but right decisions to put the institution on better footing.

“We have enhanced the risk management framework, updated policies and procedures, implemented a more stringent lending policy, aligned the provisioning policy with best practice and restructured the Bank’s operations to meet the challenges of 21st century Bahamas,” the release said.

“The Board of Directors of BDB is responsible for the approval of all loans issued by the Bank. This approval is granted following review, analysis and due diligence by management as well as recommendation for approval by the Credit Committee of the Board. The credit approval process is in line with the lending guidelines approved by the Board.

“It is common knowledge that trust, confidentiality and data protection are key tenets of the banker-customer relationship. This is the foundation upon which our second largest industry - financial services - is built and it would be inappropriate to deviate from these important virtues under any circumstance.”

Mrs Komolafe said the bank has a duty to be accountable and responsible as servants of the people and as good stewards of scarce government resources.