Prime Minister Dr. Ralph Gonsalves, left, and Opposition Leader Arnhim Eustace. (IWN file montage)

Leader of the Opposition Arnhim Eustace has described as “hypocritical” Prime Minister Ralph Gonsalves’ recent statement about the importance of indigenous banks.

“I really can’t believe that the Prime Minister will make such a statement. I really can’t believe that he wants an indigenous bank,” Eustace said on his weekly radio programme, noting that the former, state-owned National Commercial Bank (NCB) was indigenous.

In 2010, the Gonsalves government sold the majority shares of the NCB to East Caribbean Financial Holdings, a St. Lucia-based entity and it then became Bank of St. Vincent and the Grenadines.

“The fact remains that Gonsalves is responsible for the sale of the National Commercial Bank,” said Eustace, whose New Democratic Party has criticised the divestment.

Gonsalves has maintained that his Unity Labour Party administration, which came to office in 2001, strengthened the bank to the point that it was able to attract a buyer of the majority shares, and has described the divestment as “a masterstroke”.

Ahead of the divestment, the government borrowed EC$100 million from the Caribbean Development Bank to clear public sector debts at the bank.

“One just has to remember that eleven statutory corporations and two government accounts were in arrears at the NCB and causing all this problem for the banking institution,” said Eustace, an economist and a former Minister of Finance.

“They weren’t paying their debt. That is, the government institutions weren’t paying their debt and it (the bank) went under. And it went under because they had to seek a loan to clear the government’s debt,” he said.

Eustace said a condition for the EC$100 million loan from the Caribbean Development Bank was that the government sell the majority share of the then NCB.

“This is what Gonsalves bragged was a masterstroke, and now he’s saying that we need an indigenous bank? We had one. It was his dealing of the bank that caused it to go under,” Eustace said, and accused the government of using the NCB as “a piggy bank, … borrowing but not paying.”

“I find the statement so hypocritical that we need [an indigenous bank]. We had one for many years … Government actions caused it to fail,” Eustace said.