2005News

Loan regulation under fire

The president of the Commercial Bank Association (ABA), Jose Manuel Lopez Valdez, insists the monetary authorities should adjust the asset evaluation regulation to the current conditions in the country so that productive sectors can become dynamic and for the economy to grow more rapidly. He explained that if the regulation is not adapted, the economy will continue growing very slowly. Bank loans to the productive sector have dropped RD$3.6 billion from January to May this year, according to Central Bank statistics. Banks have reported recently that according to their research only 12% of their large clients classify in categories A and B for the concession of loans. The remaining 88% classify in the lower C, D and E categories. The government, on the other hand, insists that the reduction in bank lending is not due to the new system of the asset evaluation regulation, but rather to the economic situation in the country which has reduced the demand for loans. Meanwhile, the Superintendent of Bank’s office said that the regulation will not be changed because they are part of the agreement with the IMF.