By NATARIO McKENZIE
THE “deficient and archaic” laws governing the Bahamas Development Bank’s (BDB) operations are at the root of its challenges, its managing director charging that current legislation provides management with little power and autonomy.
Arinthia Komolafe, who was appointed to her post last September, told a Bahamas Institute of Chartered Accountants (BICA) seminar on small and medium-sized businesses that a ‘comprehensive’ corporate governance manual had been submitted to the BDB’s Board for approval several months ago.
“At the core of BDB’s challenges is the deficient and archaic nature of the legislation that governs the institution,” Mrs Komolafe said.
“The BDB providesfor the management of the bank with little powers and autonomy in the discharge of its duties. This had impacted the ability of BDB’s management over the years to properly implement and enforce policies and procedures related to the institution.
“The Act gives significant powers to the minister and the Board, which is appointed by the Minister, in relation to major decisions within the bank.”
Mrs Komolafe added: “This is in contrast to other statutory bodies and governmental institutions. A good illustration of this fact is that all loans granted by the bank must be submitted to and approved by the Board.
“There is no delegation of authority to management based upon established thresholds for loan applications.”
Mrs Komolafe said a comprehensive corporate governance policy manual had been submitted to BDB’s Board for approval “some months ago”.
She added: “We are hoping that it will be approved in short order.” Mrs Komolafe said the manual seeks to clearly define the roles of the chairman and chief executive, a code of ethics and conflict of interest policy.
She added that BDB’s management would be submitting recommendations for various amendments to legislation governing the institution.
Mrs Komolafe said the BDB was increasing its efforts to recover outstanding loan payments, and was seeking viable solutions under the existing restrictions governing its operations.
“The bank has had, and continues to be plagued, with challenges, the most apparent one being the high delinquency ratio and non-performing status of many of our loans,” she said.
“Despite the bank’s liquidity challenges, BDB is still open for business and we are still lending to the general public.”
Mrs Komolafe added: “Contrary to popular belief, I do not subscribe to the belief that the bank is a failure. The bank has assisted many businesses over the years, many of which are prospering today and are responsible for many of the jobs that exist in the economy.”