-Williams
Should the government decide to legislate the supervision of credit unions by the Central Bank, a special department to deal with the peculiarities of regulation would have to be set up, Governor Lawrence Williams says.
Responding to a question at a special symposium for Credit Union leaders yesterday at the Tower Hotel, Williams, while hinting at the magnitude of the task, pointed out that the administration has only communicated to him that it is actively considering this option. He noted that supervision of credit unions would require the Central Bank to develop the technical capacity to deal specifically with the sector, since it could not simply apply the same assessment methodology that was used for the banking sector to credit unions. He said that the Bank would need to employ a similar method that it had adopted when the Bank was legislatively tasked with regulating the insurance sector last year.
He noted that to achieve this particular task, the Bank would have to partner with personnel both locally and regionally. He also said that if indeed the Central Bank were to take over regulation of the credit unions, the Guyana Co-operative Credit Union League would be able to discuss matters of self-interest, which they could later provide to the regulatory body.
President of the Guyana Co-operative Credit Union League Fitzgerald Agard said that his body had not seen any proposed legislation concerning the intention to make the Bank of Guyana (BoG) the main regulatory body for credit unions.
Recently, Labour Minister Manzoor Nadir declared government’s intention to table, during the course of this year, a bill in the National Assembly to have BoG regulate all credit unions in the country.
Yesterday’s symposium was a collaborative effort between the Caribbean Con-federation of Credit Unions (CCCU) and the Guyana Co-operative Credit Union League and was held under the theme: “The credit union relevance in an era of Global Financial Meltdown.” The CCCU is the umbrella body for most credit unions in the region. The symposium was attended by representatives of the CCCU and representatives of several local credit unions.
Earlier in the proceedings, Williams, while delivering the feature address on the theme, acknowledged that globally there has been a recovery from the worldwide financial crisis there were still uncertainty in some aspects of the financial sector. Williams said that in spite of the severe impact of the global financial crisis, the economies in the Caribbean region had performed well.
Speaking about credit unions in the region, Williams noted that while many had performed well some had suffered because of the sectors of the economies to which they had been aligned as well as to investments in the CL Financial Group.
Pointing out that financial crisis cannot be ruled out even with improved regulation, Williams called on each credit union movement to review its own crisis management plan. These plans, Williams said, should not only be aimed at ensuring business continuity but also at preserving financial security in general. According to him, these crisis plans should be of the quality that they can be adopted by other components of the financial sector.
Labour Minister Manzoor Nadir, in his brief address, emphasised the importance of credit unions and stated that when properly functioning can build the lives of ordinary people. Nadir noted that there are about 47 registered credit unions in the country with about 27 of them active. He noted that last year, when his ministry decided to check the audited accounts of some of the credit unions, it became clear that some of them had poor records. Good corporate governance and good management, Nadir said, would ensure that the credit unions are not only properly regulated but that are properly branded. While noting that there are some credit unions are badly managed, the Minister said there were credit unions such as those at the Defence Force and the Guyana Public Service Union which are being managed fairly well.
President of the CCCU Yvonne Ridguard, a Jamaican national, told the gathering that the global financial crisis had presented an opportunity for leaders to rethink the credit union model. She noted that credit unions have been in existence in the Caribbean for over 60 years and that they had been formed in tough economic times. She urged that credit unions “live up to expectations” and to provide good financial services for its members. Credit unions, she said, need to be run in a democratic manner and in the best interest of its members.
Meanwhile, Ridguard said that the CCCU is willing to partner with the local oversight bodies for credit unions and with the Central Bank to help them in their regulation duties. She noted that there were several models available in the region from which Guyana could learn.
