Budget Address 2018 - Banking, financial, telecom and insurance sectors urged to bring down rates

Budget Address 2018 - Banking, financial, telecom and insurance sectors urged to bring down rates

07-November-2017
In the Budget Address 2018 which he presented to the National Assembly on October 31, Dr Peter Larose, Minister for Finance, Trade and Economic Development, said in recognition of the importance of a strong financial system that performs a vital role in driving economic development, the country needs a more dynamic banking and financial services sector to make a greater contribution to our national development and economic growth, create more employment opportunities and offer cost-effective services.
In the process, they should help to reduce the cost of living.
In line with this, he said the government also met representatives of the insurance sector to discuss ways and means to reduce their rates on insurance premiums. And as the telecommunication sector is a central pillar of any modern economy and a key driver to trade, the minister said exchange of information, business transactions, innovation, and research and development, a well-developed telecommunication system is regarded as part of sustainable development.
And with a high-income country like Seychelles, it is a “must-have” an integrated system as a service-based economy.
And during 2017, he said his ministry met the executives of this sector to discuss a joint effort to bring down the cost of telecommunication services.
“Last year, in my budget speech, I made a commitment to call on the commercial banks to reduce their lending rates, charges, while increasing their savings rates. I am pleased to announce that the banks have responded positively, albeit, not to our full expectations. This is a starting point. However, we will continue to engage them in our efforts to maintain low interest rates and longer maturity environment. Our people, who are both depositors and borrowers, will be encouraged to get closer to the banks and other financial institutions and make maximum use of their services. We want the customers to benefit from our interventions. This strategy is not to penalise the banking sector but instead to create an opportunity for the banks to gain new customers and additional transactions,” Minister Larose said.
He remarked that the Central Bank of Seychelles (CBS) is currently working with stakeholders to review the bank charges and fees that the financial institutions are charging. With this in mind, the CBS will be proposing some amendments in regards to the current bank charges and fees.
He spoke about first home acquirers where his ministry recommended they are charged a maximum processing fee of R2,500 on housing loans below R1.5 million. And for the remaining loan amount above R1.5 million, the first home acquirers will be charged a maximum of 0.5% as processing fee on the balance.
On the application of penalty interest on default loans which he said vary greatly among banks, Dr Larose said this poses a major concern as there has been instances whereby penalty fees resulted in the loan repayment more than doubling. Additionally, he added, this results in an endless cycle of applying penalty fees, even when it has become clear that the borrower is unable to pay.
“As such, it is proposed that, similarly to the international practice, borrowers in financial difficulties are encouraged to contact their banks as they are able to request rescheduling of their debts either by extending the tenor, reducing the repayment amount or by requesting a moratorium on repayment. As a result, the chances that a loan account will stay in default and accrue penalty interest for a long period of time, is low. Secondly interest rate shall not exceed 5 per cent per annum and shall be calculated on the default installment excluding the interest payable thereon. Consequently lenders cannot charge higher than the said amount.”
Dr Larose also said the insurance sector has also been called on board in line with the country’s agenda to reduce the cost of living. The discussions were based on ways and means to reduce their rates on insurance premiums. But they raised some concerns which Dr Larose said the government has taken and will make an assessment of their suggestions during 2018.
In the meeting with the telecommunication sector, Dr Larose said the ministry’s understanding of their demand is that the industry depends hugely on skilled labour, high-tech equipment, machinery and heavy capital investments.
“On-going discussions indicate that there is a willingness to reduce their tariffs if they can be assured that the government can maintain its tax rates stable. Critical to the agenda was the need to offer concessional charges to the Small Micro Enterprises (SMEs) and other corporates, which are the backbone of our economy. Given the competitive business environment time is the essence. There are many interested telecom operators who have expressed interest to penetrate our market. They are in the process of finalising their plans to start operating by middle of next year. This is a welcoming development for consumers to bring down the telecommunication costs,” he said.

http://www.nation.sc/article.html?id=256425

National countering financing of terrorism committee appointed

04-December-2017
President Danny Faure has announced the composition of the National Countering of Financing of Terrorism Committee, set up by Regulations under the Prevention of Terrorism Act.
The committee will be chaired by the Designated Minister, Macsuzy Mondon, who is the Minister responsible for Home Affairs.
The other members will be
· Minister Peter Larose, the Minister responsible for Finance;
· Ambassador Barry Faure, Secretary of State for Foreign Affairs;
· Frank Ally, Attorney General;
· Kishnan Labonte, the Commissioner of Police; and
· Philip Moustache, Director of the Financial Intelligence Unit.
The principal functions of the committee are to:
· implement the Resolutions of the UN Security Council relating to the financing, prevention and suppression of terrorism;
· formulate and supervise the implementation of the National Strategy and Action Plan on Countering Financing of Terrorism; and
· advise government, the Attorney General, the Registrar General and the Financial Intelligence Unit on their respective functions under the Prevention of Terrorism Act and the Anti-Money Laundering Act, with a view to ensuring a coordinated and effective approach to implementation and enforcement of the respective laws.

http://www.nation.sc/article.html?id=256809