The six-week old New National Party (NNP) administration of Prime Minister Dr. Keith Mitchell has given a commitment to pay small depositors of the financially-strapped Capital Bank International Ltd (CapBank) during its first year in office.
“My Government is also committed to assisting the small depositors of Capital Bank in the first year of its term”, Governor General Sir Carlyle Glean announced in delivering the 2013 Throne Speech last week Wednesday at the Grenada Trade Centre.
This latest disclosure from the new Mitchell administration follows a promise made by the Grenadian leader within days of wining the February 19 general election during an appearance of a special edition of “Beyond The Headlines”, broadcasted by the Grenada Broadcasting Network (GBN).
The promise to return the savings of small depositors to them from the controversial Bank was first made by the NNP leader in 2008, leading up the country’s General Election.
He told NNP party supporters at a public meeting that his government will apply to the high court for authority to pay depositors of CapBank who have five hundred dollars ($500) or less in the bank and cannot make withdrawals.
There are more than 5,000 depositors in Capital Bank, with approximately 3700 of them having five hundred dollars or less in the bank.
“On your behalf, I will with Cabinet, take a decision to pay those small depositors, because it isn’t fair for a poor man, struggling and hungry, to put his money in a financial institution, and when the time comes for him to get a cent, he cannot get it”, he was quoted as saying.
When the NNP was voted out of office in favour of the National Democratic Congress (NDC) Government in 2008, then Prime Minister Tillman Thomas pointed out that it was not government’s responsibility to pay depositors of the privately-owned bank.
CapBank was engulfed in controversy since it was established in 1988 by local Businessman, Finton DeBourg.
In 1990-95, the National Democratic Congress (NDC) government of Sir Nicholas Brathwaite refused to grant a license to the bank to operate based on advice given by the Eastern Caribbean Central Bank (ECCB).
Unfortunately Dr. Mitchell and his NNP regime granted the license to the Bank after coming into power in 1995 and the ECCB responded by refusing to allow the controversial local bank to use its Clearing House facility.
Capbank eventually ran into problems when depositors started to complain of not being able to make withdrawal of their funds and subsequently the Bank was taken to Court when the institution could not honour its commitments to depositors.
In the face of mounting public pressure, the Mitchell government was forced to step in and appoint a Receiver in February 2008 to take charge of the affairs of the bank.
De Bourg soon found himself in trouble with the law when he was slapped with four counts of fraudulent breach of trust for allegedly converting $18,227,902.60 of money entrusted to CapBank to himself.
The businessman was placed on one million dollars bail and his matter is now pending before the high courts.