Following an announcement that banks will be given formal directives for simplified due diligence measures to make the opening of a bank account easier for low risk customers, the Official Gazette yesterday published the measures.
“To promote financial inclusion the Bank has simplified the requirements to open and maintain a bank account for low risk customers by making corresponding amendments to sections of SG No. 13. This approach is consistent with Section 17 of the AML/CFT Act 2009 and is aligned with a risk-based approach as well as with international best practices,” the Official Gazette of January 14th states. (https://officialgazette.gov.gy/images/gazette2023/jan/official_gazettes_14JANUARY2023.pdf)
“For the purpose of this circular, low risk customers include small savers with monthly deposits up to $500,000. Examples of low risk customers include individuals who belong to lower economic strata of the society whose accounts show small balances and low turnover, salaried employees whose salary structures are well defined, government departments and government-owned companies, regulators and statutory bodies,” it adds. Government departments and government owned companies, regulators and statutory bodies may also be categorized as low-risk customers.
The circular states that to open an account for a low risk customer, a bank would have to: “1. Verify the identity • One identification required – a national identification card, a passport, or driver’s licence 2. Obtain proof of address • Self-attestation acceptable, if other proof of address unavailable 3. Obtain the source of income • Self-attestation acceptable, if other source unavailable 4. Obtain the TIN number. The form for self-attestation is to be provided by the respective institution,” and gave specimens. It said that while the objective is to remove impediments to opening a bank account, a bank should thereafter verify all the information provided by the customer through other reliable and independent means, such as the postal service or the use of available databases, and maintain documentation of same.
But it was quick to point out that “important to note that reliable and independent means do not imply requesting additional documents from customers.” The Circular to the commercial financial institutions also stated that, “Where a customer has been rated as low-risk, Know Your Customer details should be updated once every seven years. The prescribed time limit shall apply from the date of the opening of the account or the last verification date.” Bank of Guyana Governor, Gobind Ganga, had last week told the Stabroek News that the measures would be implemented soon. “It is to ease the hassle for especially lower risk customers going in there…when you go to open a bank account, you understand the hassle with them and that process; proof of address and all of that. So now you sign an attestation form, for example…,” Ganga told Stabroek News two Fridays ago.
“We will soon issue a circular…it has to be Gazetted first but we are making the banks make it easier for low-risk persons doing banking, where they don’t have to go through all of that with the banks…,” he added. The Central Bank Governor’s announcement came following a meeting between the private sector, civil society and other stakeholders and President Irfaan Ali, Vice President Bharrat Jagdeo, Prime Minister Mark Phillips and Minister of Finance Dr. Ashni Singh.
At that meeting, Jagdeo bemoaned the process that persons have to follow in opening an account here as compared to the developed world. “It’s causing disintermediation here. People are scared of going in the banks. I am scared of filling up these forms. I can’t navigate through them. It is so complex. ” he said. “Scotiabank in Canada, [they] don’t ask if you are taking out $40 [what you are doing with it]…here, I gather you have to do a number of things. It [seems] you have to take off your shirt to show…” he added. Ali compared the time-consuming process here to the ease of transactions overseas. “…You can go to some of these sophisticated markets and open an account in 20 minutes and the same person will come here and have to pass though some hurdles that is imposed that will take you two weeks or two months to open the account,” he said.
Managing Director of Citizens Bank, Eton Chester, posited that “the commercial banks are only following the directive of the Central Bank”. But Central Bank has always maintained that banks can go through the regulatory processes and maintain the Anti-Money Laundering and Countering the Financing of Terrorism compliance programme without the hassle they put their customers through. Yesterday’s Gazette notice informed that the Circular, No. 1/2023, replaces and supersedes Circular No 53/2018 and Circular No. 47/2020 and facilitates the foregoing by the following amendments to SG No. 13. A.
