The Government of Guy-ana is to partner with all banking institutions to implement appropriate policy measures to promote greater financial inclusion.
This announcement was made by President David Granger at the opening of the new head office of Demerara Bank Limited on Saturday evening.
As he charged commercial banks to “bring banking to the people” the President acknowledged that increasing the reach of these banks is best achieved under a banking system that is stable, secure, honest and flexible.
Noting that Guyana’s financial system has not been spared the implosion of financial institutions the president expressed the intention to discuss with bankers the implementation of a Deposit Insurance Scheme and strengthen the regulatory and supervisory capacity of the Bank of Guyana.
These measures are expected to bring some form of stability to the Guyanese banking system, as the deposit insurance will ensure that individuals who hold deposits at failed financial institutions would be compensated up to an agreed amount within a specified timeline.
The necessity for this safeguard as well as increased vigilance was made evident, according to the president, by the losses suffered by investors after the collapse of financial institutions.
“Thousands of depositors in Globe Trust and Investment Company suffered losses in the collapse of that company in 2001. More investors suffered losses in the collapse of Clico in 2009,” he reminded those gathered.
He also charged banks to “zealously guard against illicit funds finding their way into the financial system” as “Illicit funds can undermine the integrity of the country’s financial system thereby exposing the country to sanctions.”
Noting that one of the first acts of his government was to pass the Anti-Money Laundering and Countering the Financing of Terrorism Act, Granger said that they look forward to the vigilance of commercial banks and regulatory bodies to prevent the contamination of Guyana’s financial system with ‘dirty’ money as the Government remains committed to doing everything necessary to remain compliance with the requirements of the Financial Action Task Force (FATF).
On the issue of security, the President promised that the Guyana Police Force is being reformed.
Safe place
“Our Government is determined to make Guyana a safe place to do business and a safe destination for foreign direct investment,” he said adding that the government has “sought the re-introduction of the United Kingdom-funded Security Sector Reform Action Plan which was agreed to by the previous administration in August 2007” and then stymied, leading to its withdrawal by London.
According to the President, cash transactions are still too prevalent.
“Persons…moving around with large amounts of cash [expose] themselves to robbery. Our banking institutions can help in reducing the high incidence of cash transactions in the economy by developing appropriate instruments for the benefit of the populace and by encouraging their clients to make use of these instruments,” he explained.
Commercial banks were also encouraged to “shed their over-cautiousness towards investment in agriculture, infrastructure and manufacturing enterprises and projects.”
“Guyana is an agriculture-based economy. Our agricultural and manufacturing sectors need investment to become more diversified and competitive,” the president said adding that his Government is considering the establishment of a development bank in order to boost the development of these sectors.
“Our plan includes creating a green economy by the generation of electricity from renewable sources.
It includes reducing poverty through investment in increasing farm production and agro-processing.
It includes expanding our infrastructure with the establishment of aerodromes, bridges, highways and stellings. Investment in infrastructure will allow the commercial banks to diversify their portfolio and to reduce portfolio volatility,” Granger promised.
