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Wednesday, 09 July 2008
It has been revealed that only 50% of Government deposits held at local commercial banks have been earning interest.
The information was made public in Parliament on Tuesday when Finance Minister Audley Shaw responded to questions tabled by Opposition Member of Parliament for Central Kingston Ronnie Thwaites.
It was disclosed that the daily balance in bank accounts was between $8 and $11 billion.
This did not go down well with Mr. Thwaites who criticised the poor handling of Government funds in the banking system.
<span style="font-weight: bold">"The irony is that some of that same money that no interest is being paid on is then lent back to the government at an enhanced rate when there's a necessity for the Minister of Finance to come to the market for various instruments </span>... therefore, the loss is twice.
We don't earn any interest but we have to pay in order to finance the very things that the grant of interests aught to have been available for, and once again, it's the ordinary people who are paying for this, not once but twice," said Mr. Thwaites.
The Finance Minister agreed that the situation was unacceptable.
He said the matter will be addressed when a new treasury management system is implemented.
"We are not satisfied with the present arrangement and it is one of the reasons that I announced in the budget debate our intention to establish a proper treasury management system that will seek to maximize the earnings," said Mr. Shaw.
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