"Formed bank to increase competitiveness, reduce interest"

One of the shareholders of Commercial Bank of Maldives (CBM), Champa Hussain Afeef has stated he started a new bank to increase competitiveness and reduce interest rates in the market.

In an exclusive interview to Avas, Champa Resorts Chairman Afeef said that forming a bank was a vision of his brother popular businessman Mohamed Moosa (Uhchu). Afeef said that when he first entered the resort market, interest rates were extremely high and therefore negatively impacted on business growth. Therefore, he said he had envisioned opening a bank to make the sector more competitive and give easier access to loans and other financial instruments.

"[My] brother Mohamed Moosa, Uhchu, had this dream way before Bank of Maldives came into existence. When we first entered [tourism] sector bank interest rates were between 21-22 percent. That's when the idea formed. Without bringing in competition, interest rates cannot be lowered," he said.

CBM was formed with 55 percent share of Sri Lanka's Commercial Bank, a bank which operates around 200 branches globally. Tree Top Investments owns a 45 percent share in the Bank, which has an asset base of around MVR 150 million.

Afeef said an increase in the number of banks will increase competition and drive the interest rates downward; a key goal of CBM.

"I know that if one bank gives out at 11 percent, and another bank is giving at lower rates than that, the other banks will reduce their rates to that level. If there is demand, then interest rates must be lowered," Afeef said.

A foreign bank coming to Maldives, Afeef says is a clear indicator of investor confidence.

"When a bank enters the market like this, it shows investor confidence. CBM's partner is one of the top Banks in Sri Lanka. One of the thousand banks ranked positively internationally. They have maintained this for 10 years," Afeef said.

The Bank, located in H. Filigasdhoshuge, is the sixth bank to open in six years.