Latest update March 21st, 2025 7:03 AM
Oct 29, 2009 News
Chartered Accountant and Attorney at Law, Christopher Ram, is of the view that the Directors of the New Building Society are deliberately delaying the registration of entity under the Financial Institutions Act.
Mr Ram is of the view that this delay is being facilitated by the Bank of Guyana.
Ram said that the Bank of Guyana is misleading persons into thinking that there needs to be some special legislation in place to have NBS be put under the regulatory framework of the Bank of Guyana.
He stated that the Bank of Guyana’s utterances is “utter rubbish” adding that there is no such requirement.
He stated that it is incumbent on the Directors of NBS to have the entity registered under the FIA, “it is their obligation according to Ram.
At present, the function of NBS is up to the directors’ discretion according to Ram who himself is a former director of NBS.
Head of the Presidential Secretariat, Dr Roger Luncheon, earlier this month announced that the New Building Society (Amendment) Bill is among the priority Bills for the House when it resumes sitting later this month.
Under the proposed amendments it is expected that the New Building Society (NBS) will now be regulated by the Bank of Guyana (BOG).
BOG Governor, Lawrence Williams, when contacted recently as it relates to the non-supervision of the NBS by the Central Bank, said that they were awaiting the necessary amendments to the NBS Act.
Ram at that time, said that as a long-standing member and former director of NBS, “I welcome any serious and meaningful effort to reform the Society.”
He pointed out, however, “Naturally we have to await a copy of the Bill before we can comment on it.”
According to Ram, in the past they “have heard so many times that the NBS is coming under the BOG that one could easily believe that the Bill was ready. All we have again is another promise that an Amendment Bill will be among the priorities for the next session of the Parliament.”
Ram stated that in the past there have been promises about amendments so often that one would expect that the Bill has already been prepared.
“I would add that if the Government and the Bank of Guyana take reforming the NBS seriously, they would consult with the members and not only the Board of the NBS, which has used the proxy system and the venue of Annual General Meetings to secure their political control of the Society.”
Ram added, too, that he is surprised at the continuing reluctance of the Bank of Guyana to take any initiative to deal with the financial sector, in which it is bound by law to supervise the participants in the sector.
Williams, ever since April last, had announced that the bank has already taken steps to bring the NBS under its direct supervision, even as some “management issues” had been uncovered.
According to him, the action taken by BOG has been endorsed by the authorities and the necessary legislative changes to give effect to a prudent regulatory regime were being drafted.
Williams, when he made the disclosure, was at the time responding to queries by Cyril Walker, Chairman of the Concerned Members of the NBS, in response to concerns raised by that group.
The group through its chairman, raised concerns about the NBS not being licensed under Section 3 (2) of the Financial Institutions Act, which would have placed the Society under the supervision of the BOG and suggested that the NBS had taken advantage of this.
The group said: “Taking advantage of this failure to register, the society has been conducting its affairs in a manner that we consider dangerous to the members and the financial sector generally.”
The group cited the example of the society’s $1.5 billion purchase of shares in the Berbice Bridge Company from the financially troubled CLICO Company.
It said that such a purchase is “inconsistent with the Single Borrower Limit of the FIA but pointed out that “it may have been done in a manner that could be deemed inconsistent with the NBS Act and Rules.”
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