By Tabora Bojang
The Governor of Central Bank of the Gambia, Buah Saidy has declared an uncompromising stance of the apex bank on enforcing its mandate to regulate and supervise commercial banks saying if necessary, the CBG may seek the support of the National Assembly to surge its powers to enable it do its job unhindered.
Governor Saidy made these remarks during an interface with the Finance and Public Accounts Committee of the National Assembly Thursday.
He told deputies that the CBG under his reign will not deter in taking the “best necessary actions” to regulate and supervise the financial sector towards harnessing economic development.
“Interest rates of the Banks are too high and there are no justifications for those exorbitant interest rates, amid the economic fundamentals of the country. We have liberalised lending rates, lowered inflation, shifted treasury bills from double to single digits, our reserve built and the budget is manageable so there is no reason for commercial banks to still pay depositors 0. 5% while charging about 20% in interest rates. As the CBG we are not going to tolerate it. We have to use our powers to give instructions to Banks and those instructions must be followed. If the laws are inadequate, we will come here [National Assembly] to empower us so that we are able to do our job but we will not allow our financial sector and the Gambian people to be vulnerable because where when the system collapses we are the ones going to face the consequence”, Governor Saidy added.
He disclosed that the CBG has intervened in the wake of the Covid-19 pandemic by taking several monetary decisions including advising commercial banks to prolong the loan periods of clients.
The Governor stated that these decisions have not been welcomed by some commercial banks in the country, arguing that the CBG does not have power to regulate interest rates or dictate to them since it has been liberalised.
“They [commercial banks] have to invest in the country’s economy. We even force one of them [bank’s] to give loans following their insistence not to give loans. We have to move on as a country because we don’t have the luxury of time, the resources are here and we just have to be creative and If necessary, go the National Assembly to have the necessary legislation which will also allow for the establishment of investment banks to facilitate medium to long term lending,” the Governor said.