He also said there would be opportunities with a limit of up to $250,000 for persons who need immediate relief, noting that government is sourcing facilities for credit unions.
However he insisted that policyholders with over $75,000 would have to settle for the 20-year bonds and a discount rate of 90 cents “or more,”
Dookeran was piloting a bill to provide for variation of duties and taxes. He said government has a responsibility to protect small depositors and about 25,000 short and longer term policyholders, who will get a minimum payment of $75,000. He promised that payment "within weeks.
Dookeran added: “Whether we can complete all that before the end of the year or not will depend on the administrative capacity but I can say we’ll certainly deal with all those who have had less than $75,000 in deposits before the end of the year.”
He also spoke of efforts by the Bharath committee to find an alternative solution. “We assessed and recognised there were two areas that ought to be given immediate concern: Those who depended on Clico investments for immediate needs and credit unions.” Dookeran said.
He said there "a humanitarian policy" for people who may wish to apply because of immediate financial needs. The minister promised that a window to allow such persons funds up to $250,000 “would soon be put in place.”
He added, “There is a limit, there is no such thing as a free lunch. We cannot extend this to its full amount. But it will deal with those who have need for cash for non-discretionary purposes, including necessities of life.”
Dookeran said Government “looked carefully” at the Bharath team’s proposal and found proposals coming from the groups could not stand scrutiny and in the end Government would have to find the funds.
“Therefore one aspect that has emerged has been the 20-year zero rated bond,” he said. However he explained that people would not have to wait 20 years since “anyone can exercise his right to go into the secondary market and discount his bonds at any time...
“I would expect people would make prudent decisions as to whether they discount for liquidity purposes and reinvest it for their own benefit or whether they allow it to mature at the end of each year and get the 100 per cent.
“I don’t think the Government is expected to make that decision on behalf of investors,“ he said.
"The question really is, at what discount rate? So let me dissuade anyone who feels they have to wait 20 years. If they wish to do so, they get par value. If they do not wish, they can go to secondary value. We’ve talked to banks and financial institutions and given them what we believe is a rate of discount.”
The minister said in the first five years that rate would be an average of 90 cents or maybe more.
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