Minister of Governance Raphael Trotman yesterday added to growing speculation that the government may soon be withdrawing large amounts of public money from commercial banks.
The planned move has raised concerns within the Private Sector Commission (PSC).
At the post cabinet press briefing at the Ministry of the Presidency, members of the media pressed Trotman on how much government money was currently in private financial institutions and if in fact it was the $60B figure stated by the PSC on Tuesday.
Trotman said that “the PSC’s concern about the movement of government’s money out of private hands, naturally they would be concerned. I think they should also accept two things that one, that it is not always the case that government keeps that amount of money in other parts of the world in commercial banks. Secondly they themselves will admit that there is excessive liquidity and people are not borrowing, that there is a lot of money just lying in banks.”
He said that he was made aware of the figure stated by the PSC and that it could be more or less. Trotman took a jab at the former Finance Minister Dr Ashni Singh when he stated that “I’d have to ask the predecessor minister Dr Ashni Singh how much he put away there.”
The minister said that “it is a matter, of course, the Minister of Finance will come to, I believe, a healthy compromise between banks and government’s position. I don’t think that either way we can have all of government’s money out of commercial banks neither can we have all of government’s money in commercial banks so there has to be a healthy compromise.”
The PSC raised their concern on Tuesday while addressing a range of other matters. In a statement, the PSC said that a meeting it held with the business community focused on matters of employee retrenchment, the “sudden increase” in crime, spending on Government projects and matters related to how the clearing of goods and the processing of investment agreements are affecting businesses.
The PSC reported that there is an increased level of loan defaults being recorded in some sectors of the economy and added that it was of the opinion that once there is a decline in consumer expectations and spending, sales and profits can drop.
The PSC also reported that business representatives said that they have noticed a drop in consumer spending and expectations. Further, projects are being delayed/suspended due to the cessation of payments and foreign and local business partners have put a hold on some investments.
Attempts by Stabroek News to speak yesterday with the Finance Minister Winston Jordan for further clarification on the amount of state funds currently in commercial banks and whether the government was planning on removing all funds from private commercial banks proved futile.
