Commercial banks will now have to extend special facilities to those people from the islands ravaged by Hurricane Dorian who have debt but no longer have income, and those who may need loan facilities quickly, Governor of the Central Bank of The Bahamas (CBOB) John Rolle said Wednesday.
Rolle, who was a guest on Guardian Radio talk show Z Live, explained that banks typically have these types of facilities for times of catastrophe. He explained that banks will likely have to extend breaks on mortgage payments and other loans until people can put their lives back together.
“Our (the central bank’s) focus is on making sure that we can get people to a recovered state as quickly as possible,” Rolle said.
“We coordinate with and have discussions with the banks on how they manage their relationships with their clients. One of the things that happens around these time is for all of those persons who are impacted, their income has stopped, so if you have loans with the banks there is no way you can even think about making payments on your loans.
“The banks typically do have facilities where they would automatically extend a break in terms of the payment on your loans, until you get back on your feet. In a case like this, which is very catastrophic, I would imagine that those policies would be even more flexible in terms of how soon realistically people would get back into a position to meet their financial obligations.”
Rolle also said banks will have to look at working with affected customers on extra credit facilities to help them “get back on their feet”.
He said these are the times banks will need to be less rigid with downpayment requirements and the terms of monthly debt payments as a percentage of income.
“In a case like this, you don’t want to be rigid,” he said.
“Worry about whether they can recover in a satisfactory way over the medium term.”