Denied loans may be approved by parliament later: Nazim

Chairman of Parliament’s Public Accounts Committee Ahmed Nazim has said that the loans previously denied by the parliament may be approved at a later date. The parliament has refused to approve the loans proposed by the government to complete the construction of the new wing of Indira Gandhi Memorial Hospital (IGMH) and the ten storey mosque-fund building, citing high interest rates as a reason.

Three out of eleven loans proposed by the government have been denied by the parliament. They include a loan of MVR 73.5 million for the completion of the new ten-storey wing of IGMH. The interest rate of this Islamic Bank loan was 10 percent, and the loan was thus rejected by the committee.

Nazim said that the MVR 15.2 million loan for the construction of a ten-storey building to facilitate the collection of funds to the mosque fund, also carried an interest rate of 10 percent.

“These loans proposed by the government were not approved because they carried interest rates of 10 percent. Even though they were not approved today, it is likely that they are approved in the future by making changes to the budget committee’s decision,” said Nazim, who is also the MP for Dhiggaru.

It was included in the budget passed for this year that the parliament shall not approve loans obtained by the government or loans for which the government acts as a guarantor, that carry more than 7 percent interest rates.

The Public Accounts Committee also rejected one loan due to lack of information. Nazim said that the bank from which the loan was to be obtained was not stated, but the loan would be approved by the parliament once the necessary details are sent to the committee as required under the Public Finance Act.

The amount for loans stated in this year’s budget is $150 million (MVR 2.3 billion).

The Public Accounts Committee estimates that the loans, taken for developmental projects, will not affect the budget in any way.