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NBS to fall under BOG scrutiny

Jul 23, 2010 News

…will be excluded from law on cash reserve requirement

The National Assembly last evening approved legislation to have one of Guyana’s oldest and largest financial institutions, the New Building Society, to fall under the Bank of Guyana’s scrutiny and regulation.
The regulation was welcomed but the debates turned lively as it relates to a clause that saw the removing of the possibility of at least 50 members calling for a special meeting.
The debate was witnessed by several persons who had tried to get the debates to be deferred including Chartered Accountant Christopher Ram, Consumer Advocate Eileen Cox, Political Activist Desmond Trotman and Ramon Gaskin among others.
Speaking to the Bill which he successfully piloted, Finance Minister Dr Ashni Singh said that the legislation has to be seen in the context of the realities as it relates to the financial sector globally, regionally and locally.
Dr Singh said that Guyana was able – with the exception of one isolated case, namely CLICO (Guyana) – to not feel the brunt of the effects, because of the strong financial legislation and measures in place, and added that the amendments are just meant to complement what is already in place.
“The Bill before us is just another step to make sure NBS remain strong.”
He said that the Bill will bring NBS under the scrutiny and standard supervision of the Bank of Guyana.
Shadow Finance Minister Winston Murray in response to the Minister said that what he was silent on was the fact that the ability of 50 persons to petition for a special meeting should they have a grouse is being eliminated.
This is being replaced with a clause that says 10 per cent of the membership has to be able to petition for a special meeting.
This Murray explained that this reduced the ability of members to hold the board to task.
Government speakers such as Labour Minister Manzoor Nadir and Dr Singh said that the law that provides for 50 persons petitioning for a special meeting is based on a law that was enacted in 1940 and when the institution was small.
Dr Singh explained that the scale and magnitude of the operations at NBS has dramatically changed over the years.
Murray also explained that he had a problem with the fact that NBS will, under the approved legislation, benefit from the exclusion of the taxes on earning, waiver of licencing fees and the cash reserve requirements.
Murray explained that the cash reserve requirement is important but Dr Singh explained that it has to be looked at in context.
He said that NBS is peculiar in the sense that their assets are protected by insurance and the fact that the properties are immovable assets.
Murray as well as Khemraj Ramjattan of the Alliance For Change failed in their call on the Minister to defer the bill or take it to a special select committee where there could be greater consultation with the membership of NBS.

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