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Wednesday, March 21, 2007

New crisis at Home Finance Company Limited?

The Deputy Governor was seen leading an inspection team from the Reserve Bank of Fiji into Home Finance Company Limited early this week. Home Finance (also known as HFC Finance) is a subsidiary of the Fiji National Provident Fund. Given that it is a deposit taking institution under the Banking Act 1995, it is supervised by the Reserve Bank of Fiji.

During my time at the Reserve Bank of Fiji, never once did the Deputy Governor lead an on-site examination/inspection team that had gone into one of the banks or other deposit taking institutions supervised by the Reserve Bank of Fiji. The teams would go with someone designated as "examiner-in-charge" to lead the team. Rarely would the head of the financial system supervision department even go.

So does the appearance of the Deputy Governor leading the team, a signal of a crisis at that institution? The other signal that things are serious is that he was at Home Finance for the better part of the day.

The other question that arises is : "Has complaints about the Reserve Bank's failure in its supervisory role and its monetary policy settings (which were raised earlier in this blog and covered well locally by Fiji Television) now woken them up?"

More on this should definitely come out over the next few days.

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At 4:13 PM, Anonymous Anonymous said...

you can run but cannot hide...sooner or later it is going to catch up...crisis do not happen over night...wonder whose oversight will it be?


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