Loans for 206 projects will be given within regulations: BML

BML stated today that loans will be given to the 53 private Maldivian companies that were awarded the 206 projects last Wednesday as per regulations and credit policies.

As per a statement released by BML in response to claims that loans will be given to the 53 companies without the approval of BML's board, it states that if they are customers of the bank, they have the opportunity to request a loan under their regulations.

"We will fully take into account the credit policies when giving out loans under business regulations," as was said in BML's statement.

At the agreement signing ceremony last Wednesday, Finance Minister Moosa Zameer stated that, "The Maldivian businesses that have been given the projects will be steadily compensated under Contractor Financing policies via banking finance."

Zameer also gave his assurance that the companies that were awarded the projects will be steadily compensated.

The minister stated that the trust the companies being financed for the projects have in the government and Maldives' economy is important to the government. 

The minister went on to say that the agreements will be within the Public Investment Framework and that arrangements to monitor the work will be included in the framework so as to reduce risk and ensure payment assurance.

"With that, the banks will also receive a decent profit, with it facilitating funding for other projects," said Zameer.

As per the statement released by BML today, their board and management conduct their work with complete prudence and independence. The statement also reads that this is evident through their corporate governance and international standards.

"...we deny all claims that the funding being given to contractors under the agreements signed between Maldivian private companies and the government are against the BML board's permission and loan regulations," as was written in the statement.

As per BML, they are abiding by standards set by the international banking industry. They also stated that their framework was established under the Maldives Banking Act's regulations, prudential regulations and standards set by the Maldives Monetary Authority (MMA), and under international standards such as Basel III and IFRS 9.

"Along with these, international audit firms have been regularly auditing the bank. Independent audits have also confirmed the validity of the bank's operations."

BML highlighted that they operate as per strategies approved by their board and various operational policies determined by the board as well. They also said that they abide by the decisions and recommendations made by the board. 

"The loans given by the bank are in line with BML's credit policies and MMA's rules and regulations. We will also take into account the ability and inability to repay loans, along with Single Borrower Exposure and Group Borrower Exposure," said BML.

The bank went on to say that before giving out a loan, they always check a borrower's ability to pay back loans. Loans will be given as per "underwriting" standards and that that is what the bank always abides by.

BML also stated that while their board has determined loan limits to various industries, the amount that the bank can invest in government projects is also included.

BML said that their board has also determined the amounts they can loan for companies with government shares, along with loanable amounts with the government's guarantee to various parties and loans that can be given to private companies based off government receivables.