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Support for Mr. Ram’s assertion on NBS
Dear Editor,
I refer to the article appearing in the Kaieteur News of Friday 18 September 2009, entitled, “NBS bottlenecks as a result of management’s shortsightedness”. The headline is attributed to a statement made by Mr. Christopher Ram.
I am a little surprised that Mr. Ram, who fancies himself as a lawyer, and who I believe is in fact a law student, did not refer to the proviso to section 7 of the NBS Act Cap 36:21, which is the real reason for the Society’s current problems.
You see section 7 of the Act empowers the Society to do certain things e.g. to raise funds by issuing shares, to make loans, to receive deposits or loans from certain specified persons, etc.
Under the proviso, the Society cannot engage in these permitted activities if the total amount received on deposit or loan by the Society exceeds two thirds of the amount for the time being secured to the Society by mortgages.
Put simply, the liabilities (monies deposited in the Society which are payable by the Society to its depositors) cannot exceed two-thirds of its assets (i.e. money due to the Society on mortgages).
That the Society has found itself in this position is indeed as a result of management’s shortsightedness and I therefore agree with Mr. Ram’s assertion. The chairman of the Society needs to extricate his head from that other part of his anatomy and come clean with the Society’s members and the public at large.
This is why the Society is now sending its customers to the Commercial Banks. Its constituent Act forbids it to lend anymore money having regard to the fact that the Society’s policies have put it in breach of the provisions of that Act.
Bibi K. Nandram
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