by Linda Straker
- Consolidated fund funds at GDB for sub-loans can be loaned to members of legislature
- Caribbean Development Bank funding to GDB is used as per agreement in place
- Finance minister has oversight responsibility for GDB operations
Finance Minister Dennis Cornwall said that funds from the Consolidated Fund that are put into the Grenada Development Bank (GDB) for sub-loans can be loaned to members of the legislature, directors and their families because there are no rules within the bank’s operations that restrict the bank from taking such action once it involves funds from central government.
“The GDB is funded from 2 sources, the Caribbean Development Bank is one of the entities that provide funding to GDB to be carried out in a manner to the agreement that is in place. In that agreement, yes it is stated that funds that are placed in GDB should not be utilised by a minister or politician but the rules governing the bank never said so about funds from Government,” Cornwall said. “I think they are using a clause in one of the agreements with the bank and the CDB where it says that money put into the bank by CDB is not there for politicians to take from it; these are specific rules that were put in there.” Cornwall is of the opinion that only funds from the CDB is applicable to Section 5 of the legislation.
Opposition Leader Dr Keith Mitchell has condemned the decision by the bank to sub-loan funds contrary to Section 5 of the GDB legislation. One director who was appointed following the June 2022 General Election has confirmed receiving a loan from the Bank.
Section 5 of the GDB legislation subtitled “Prohibition relating to sub-loans” states “The Bank shall not make sub-loans out of the proceeds of the loan to a director of the Bank, to a member of the Legislature of the State of Grenada or to any company controlled by any such director or member of the Legislature or to the close relatives of any such director or member of the Legislature.”
The legislation has been amended 7 times since it was established by Act number 11 of 1976. Section 4 provides for protection of interests of the Caribbean Development Bank. It states, “The bank shall exercise its rights in relation to each sub-loan financed in whole or in part out of the proceeds of the loan in such a manner as to protect the interests of the Caribbean Development Bank.”
“GDB was basically created to provide small businesses, medium businesses with funding to ensure that they can carry on their business. It does not say that government officials cannot borrow money from GDB,” he said while explaining the bank’s funding sources. “Government from time to time puts local revenue in the GDB for lending to the populace and there is no restriction on that as far as I am concerned.” The finance minister has oversight responsibility for the operations of the bank.
It looks like the country went from bad to worst.
The next step for this guy is to put his wife as his permanent secretary?
Exactly… Well Said. Favoritism and Corruption didn’t take too long to blossom.
What’s that called: insider loans.
What these Ministers plus all those Directors forget are all the other Citizens of Grenada. The Citizens struggle and live paycheck to paycheck while these chosen few -: they are living high on the hog, thus what else matters. But It Does.
Are not Directors suppose to keep arms length from the Cookie Jars ? Same with all of the Ministers. Bad precedent.
The Swamp even includes on Island Banks ? This is how Corruption takes deep hold.