[Silver Bank] Navin Ramgoolam denounces a Rs 3 billion investment disregarding all financial prudence

Former Prime Minister Navin Ramgoolam raised a significant concern in the National Assembly on Tuesday, questioning whether public funds were used to artificially support Silver Bank. He directly implicated former Finance Minister Renganaden Padayachy in the decision to invest Rs 3 billion from the Project Development Fund into the bank in 2022.

According to Ramgoolam, these investments were approved despite the bank's already questionable management. Even more troubling, Silver Bank was offering an interest rate of 4% for a twelve-month term, while other banks were only offering between 0.75% and 1.25%. "It’s clear what was happening," the Prime Minister remarked, suggesting that such a disparity should have immediately raised alarm bells.

For Ramgoolam, this decision is "hardly justifiable on an objective financial basis." He argues that the most plausible explanation is that this investment was primarily aimed at "artificially bolstering Silver Bank's financial situation and balance sheet."

Of the Rs 3 billion invested, Rs 2.5 billion has been recovered between 2023 and January 2024, primarily to fund social housing projects and the National Flood Management Programme. However, Rs 500 million remains frozen.

The Prime Minister also criticized the Project Development Fund committee, which is composed of former high-ranking officials and financial sector specialists. He stated that no serious market analysis could justify an investment at a rate nearly four times higher than that of other banks.

He asserted that the circumstances suggest the decision was virtually predetermined, "influenced by a not-so-invisible hand," disregarding basic logic and principles of sound financial management.

For Ramgoolam, this situation represents a serious breach of the duty to protect public funds and raises serious questions about how taxpayer money was managed under the previous regime.