27 Aug 2015

Tonga banks under fire from Prime Minister Pohiva

5:54 pm on 27 August 2015

Tonga's Prime Minister 'Akilisi Pohiva says banks should cut interest rates and keep their annual profits below $US900,000.

Matangi Tonga reports the prime minister telling Parliament the banks have a lot of money but the people are reluctant to borrow because of very high interest rates.

Mr Pohiva says this is why a growing number of Tongan businesses are closing down.

He says often properties then get taken over by foreigners which he characterises as like neo-colonialism.

Tonga Prime Minister 'Akilisi Pohiva.

Tonga Prime Minister 'Akilisi Pohiva. Photo: RNZ

Mr Pohiva says the superannuation fund, the National Retirement Fund, should become a bank.

Lord Vaea told the House he did not know what the prime minister was talking about.

The Finance Minister, 'Aisake Eke, told Parliament the total profit for all the commercial banks in the past year was $US5.7 million dollars or 2.3 percent of the total amount they lend, and is significantly below the profit expected by shareholders.