JLP wants auditor general to probe PC BanksFriday, May 01, 2015
OPPOSITION Spokesman on Finance and Planning Audley Shaw has called on the Ministry of Finance, as well as the Auditor General, to carry out an immediate investigation into the management of the National Peoples' Cooperative Bank (NPCB).
According to Shaw, since the expiration of its licence to operate at the end of March 2015, the Agricultural Credit Board (ACB) has apparently refused to issue a new Certificate of Registration to the NPCB, thereby making its present operation now irregular if not illegal.
He said the ACB's failure to re-register the NPCB is apparently as a result of "several major breaches of fiduciary duty at the institution, including failure to provide reports on a timely basis, as well as conflict of interest in the award of loans to persons connected to the management of the institution, and which are now delinquent".
"Over $200 million is reportedly in this category and forms part of a portfolio of non-performing loans, which has moved from $189 million in 2010 to over $800 million now," Shaw said in a statement yesterday.
He added that other concerns include the NPCB's inadequate capital base of less than 10 per cent of liabilities, as well as the reporting by the NPCB of over $1 billion in a special reserve fund as an asset, when, in fact, this fund has been depleted and written off by lending agencies.
"When this reserve amount is removed as an asset from its balance sheet, the NPCB is, in effect, insolvent," Shaw argued.
"The investigation by the Ministry of Finance and the Auditor General is urgent as the deposits of over 200,000 members of this Agricultural Credit Institution -- NPCB, are at risk," he said.
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