Central Bank advises on auction processes

On 16 October 2017 at 09:19

The National Bank of Rwanda (BNR) has called for transparency in the process of auctioning mortgaged items whose owners are unable to service their bank loans.

The statement was made on Friday during a meeting between Rwanda Development Board (RDB) and players in the tourism industry from the private sector and other government institutions working closely with the sector.

Tourism sector investors claimed that they are charged high interest rates on loans as well as inaccessibility to long-term loans, charged undocumented fees on loans and become worse when they fail to repay in the due period, getting their properties auctioned.

In reacting to investors’ concern, the vice-governor of BNR, Dr. Monique Nsanzabaganwa said it is improper for auctions of mortgaged properties to be carried out in a process that is not transparent which breeds impropriety.

“There are times when there are injustices and corruption in the auctioning process; sometimes when you pay much attention on how it all went you get confused. This is a big issue that needs to be addressed by all concerned institutions,” she said.

She said that it is wrong for bank employees to decide on how the auction should be conducted where they get some kick-backs; she cautioned that it is a problem that should be taken care of if they want to rebuild the image of the sector.

The Chief Executive Officer at RDB, Clare Akamanzi said that they are going to form a joint committee by RDB, Ministry of Finance, BNR and Private Sector Federation (PSF) that will monitor banks’ loan recovery process.

“Our government promotes investment, tourism and private sector; I think that when we propose tangible ideas, the government will embrace them,” she said.

Nsanzabaganwa (L) and Rwanda Revenue Authority Commissioner General, Richard Tusabe
Participants in the meeting