Rf300m loan already taken when issue was sent for Parliament approval

Ministry of Finance said today that Bank of Maldives (BML) had issued the loan of Rf300 million to the government sometime last month.

The government had sent the issue of Rf300 million loan to Parliament’s Finance Committee for approval.

Minister of Finance Abdullah Jihad told Sun Online in an interview today that the loan agreement between the government and BML was signed last month, while the Parliament was in recess.

“The loan had to be obtained urgently. The Parliament was in recess at the time, so we took the loan and sent the issue to the Parliament,” Jihad said.

He said that the first payment of the loan was received last month, and the last payment was received late this month, and that the money is being utilized for government expenses.

Jihad said that having obtained the loan is not likely to cause any legal problems.

“It is not a problem to take a loan in this manner. When the budget was passed, it was passed that loans can be obtained for budget support,” he said.

Finance Ministry had informed the Finance Committee that the government had decided against taking the $65 million loan which had been included in the budget, and instead requested to take out a loan of Rf300 million from BML.

The Committee had made the decision to obtain the advice of the Council General on whether the decision can be made by the Financial Committee, or if it has to be approved by the Parliament.

Finance Committee Chairperson Dhiggaru MP Ahmed Nazim said today that the loan was included in the budget as budget support, however the date of signing the agreement should be considered.

“Technically the loan is included in the budget, which means it was passed by the Parliament. There are other issues to consider however, such as the date when the loan agreement was signed,” Nazim said.

Repayment of the loan should commence within 23 months of obtaining it, and a total of Rf354 million will be spent to repay the loan. The interest rate for the loan is 33 percent.

A resolution has been submitted to Parliament, to take action against the Finance Ministry for taking a loan without the approval of the Parliament.