Indian Bank to cash-in on ‘golden opportunity’ from Guyana’s oil

Mar 18, 2021 News

– named country’s newest mortgage finance institution

By Gary Eleazar

Minister of Finance, Dr. Ashni Singh, and Bank of Baroda’s Managing Director, Arun Gupota inking the agreement in the presence of Minister of Housing, Colin Croal (far right), and Indian High Commissioner to Guyana, Dr. K. J. Srinivasa,

Kaieteur News – India’s third largest public sector bank—the Bank of Baroda—on Wednesday last saw its Guyana subsidiary being designated an official Mortgage Finance Institution under the laws of Guyana.
The status was officially conferred on the Institution by Senior Minister within the Office of the President, with responsibility for Finance, Dr. Ashni Singh.
The modest signing ceremony was held at the Arthur Chung Conference Centre (ACCC), where Dr. Singh was joined by colleague Cabinet Ministers with responsibility for Housing and Water, Colin Croal and Susan Rodrigues.
Also present for what was described as an auspicious occasion was Indian High Commissioner to Guyana, Dr. K. J. Srinivasa, along with Bank of Baroda Guyana Inc.’s Managing Director, Arun Gupta, along with other staffers.
Addressing the gathering, Dr. Srinivasa underscored that it was the developmental trajectory that Guyana has taken on in recent years as a result of the country’s colossal oil find that has largely led to the bank remaining in the country.
It was observed by the stakeholders that in 2018, the Bank was actively considering exiting the Guyana market, where it hosts two of its 9,000 branches worldwide.
According to Dr. Srinivasa, the move by the two governments signifies a deepening of the collaboration on various projects such as the Ogle to Diamond road, projects in the agriculture sector, hospitals and vaccines, among other fronts.
He noted that in 2018, while stakeholders were discussing the future of the bank’s operation in Guyana, it was determined that the country’s projected growth would in fact be a boon for the financial institution with a worldwide customer base of some 113 million person.
Guyana, he said, was deemed a developmental “growth story” and that nobody should miss out on the “golden opportunity”.
He was adamant that, once Guyana’s growth takes off, real estate would become a particularly high priced commodity and urged potential new home owners to act with haste.
The Indian High Commissioner did opine that the Guyana Government does in fact recognises that the country cannot be solely dependent on its emerging oil and gas sectors and spoke to continued collaboration in other sectors.
Gupta, the Bank’s Managing Director, in his remarks noted that with the newly endowed designation, the institution would now be in a position to provide expanded services, namely mortgages and increased loans for low and middle-income earners.
It was explained that the relief granted to the bank comes in the form of an exemption from paying corporation taxes earned by the bank on the mortgages it would provide.
Gupta told stakeholders that with the new designation, the institution will be able to provide competitive financing, the likes of the New Building Society (NBS) which was this past week given permission to increase its lending ceiling while reducing interest rates charged.
Conducting business in Guyana since before the country attained independence in 1966, it was noted that the bank is currently actively considering the expansion of its physical locations domestically, in addition to its expanded range of services to be offered.
He noted that the bank was pleased to be a part of the current administration’s drive to provide 50,000 house lots over the course of its first term in office.
Croal, the Minister of Housing and Water, in his remarks noted that the activity represented just one of three such events over the past week that were all part of his government’s policy to expand housing in Guyana.
He drew reference to the NBS approvals in addition to the inking of some 200 contracts to the tune of $13.9B on Tuesday last at the ACCC that serves to provide the infrastructure required for the creation of new housing schemes.
“We live in a society where the quality of housing is important,” said Croal as he pointed to the spin off effects of the measures taken in totality.
He pointed out as an example, that with the 200 contracts, it would also mean increased employment, which would in turn lead to increased demand for varying goods and services.
As such, he commended the bank, for taking the right step to ensure that they play a part in the provision of housing in Guyana.
The Minister noted too that with the increase in the distribution of house lots to Guyanese, there will also be a corresponding growth in the demand for loans.
Finance Minister, Dr. Singh, in expanding on Croal’s position observed that stakeholders were currently in the process of “literally building Guyana” and noted that housing locales such as Eccles, Onderneeming and Parfaite Harmonie were only recently constructed and that they serve as testimony to what can be achieved with the right government policies in place.
Recognising the constitutions of the Indian Bank, Dr. Singh noted that the Bank of Baroda has a special place in Guyana’s financial landscape as he qualified the fiscal concession granted to the institution.
Guyana, he said, is at an important juncture in its developmental trajectory and recognised that Bank of Baroda is in a unique position to capitalise on its investments locally, given the all time high interest for foreign direct investments, which the bank can leverage to its advantage using its international networks.