A bill which aims to provide the legal framework for foreign financial institutions to establish representative offices in Guyana with approval from the Bank of Guyana was passed on Monday during the 101st Sitting of the Twelfth Parliament.
Senior Minister in the Office of the President with responsibility for Finance Dr Ashni Singh, who presented the Financial Institutions Bill No. 22 of 2024, emphasized its importance despite its simplicity. He explained that the amendment, which inserts a new section (19a) into the Financial Institutions Act, “allows foreign financial institutions to set up representative offices in Guyana, an initial step toward establishing a more robust financial presence in the country. These foreign institutions would be subject to supervision by the Central Bank of Guyana and must obtain a licence before commencing operations.”
Singh highlighted that this bill is part of a “broader strategy to create a stable and sound financial system in Guyana.” He further stated that over the past few years, the government has enacted several pieces of legislation to improve financial supervision, such as the Bank of Guyana Act and anti-money laundering regulations. The ultimate goal, he explained, is to create a competitive environment where international financial institutions are encouraged to explore business opportunities in Guyana and contribute to its growing economy.
“Already, we have received indications of interest from some of the largest financial institutions in the world, showing their willingness to establish representative offices here,” Singh remarked. “This is just the beginning, as it provides them with an opportunity to familiarize themselves with Guyana’s business landscape and lays the foundation for a broader presence in the future.”
However, the bill did not pass without some concerns. Juretha Fernandes, the Opposition Shadow Minister of Finance, raised concerns about the uncertain financial environment in Guyana. She argued that the banking sector is dominated by “a few entrenched players”, and international banks may view the risks associated with entering the market as outweighing the potential benefits.
Fernandes pointed to high inflationary pressures, currency volatility, and a lack of effective tools at the Central Bank as factors that could deter foreign investment. She also referenced the country’s low Transparency International Corruption Perceptions Index score of 39, suggesting that high levels of mismanagement “could” create an unpredictable business environment, further discouraging international banks.
While she did not object to the bill itself, Fernandes called on the government to take more fundamental steps to address issues in the financial sector. She proposed legislative changes to set clear criteria for new banking licences, introduce timelines for licence application reviews, and promote competition by removing structural barriers that prevent new players from entering the market. She also suggested publishing key performance indicators for banks, such as interest rates and consumer satisfaction scores, to ensure transparency and improve the quality of banking services.
In his response, Singh dismissed criticisms of the bill, stating that the government should not “let the perfect be the enemy of the good.” He stressed that while the bill may not solve all the issues facing the banking sector, it is an important and necessary step in the right direction. Singh also addressed concerns about the country’s financial growth under the PPP/C government, pointing to statistics, such as a 73.4% increase in private sector credit from 2020 to 2024, compared to just 18.2% under the previous administration.
Singh added that the agriculture, mining, manufacturing and housing sectors have all seen significant growth in recent years, with agricultural credit increasing by 128% and the housing credit programme growing by 71.9%. In addition, average lending rates have dropped, with the average prime lending rate now standing at 8.8%, compared to 13% during the previous administration.
“This bill will not be the last amendment to our financial system, but it is an important one,” Singh said, adding “It sets the stage for continued progress in strengthening our financial infrastructure.”
